SBA 7(a) Car Wash Feasibility Study in Tennessee

Tennessee's car wash cell is heavy: the median loan of $1.3 million is 1.59x the nationwide 7(a) car wash median, and half of the 33 loans lie between $350,000 and $3.3 million. Total approvals come to $62.2 million, so the average loan is near twice the median and a few express tunnels carry the totals. Tennessee takes 21st place on loans counted, with washes in 14th place among its 39 asset classes. Franchise share is 6.1%.

One bank carries it

One lender, Celtic Bank Corporation, appears: 7 loans and $22.0 million, an average well beyond the cell median. That tells a reader the biggest tunnel projects in the state came through one bank, according to SBA's holder records, which describe volume and not method. Rutherford County has 7 loans, Williamson 6, Davidson 4, Maury and Shelby 3, Hamilton 2, and Cumberland, Dickson, Hawkins and Madison 1 each. Two adjoining counties, Rutherford and Williamson, hold a large share of the cell.

Annual swings

FY2017 saw 5 loans and $8.3 million, FY2018 2, and FY2019 5 at $10.3 million. FY2020 stands out for dollars: 4 loans carrying $15.0 million. FY2021 had 5 at $6.5 million. Then 2, 4, 1, 3 and 2 loans followed, with FY2026 at $1.3 million. When 4 loans can carry $15.0 million, no year is typical.

Withheld rates and the code

Cancellation and charge-off rates are both held back for want of loans in the cohorts, and zero would be the wrong reading of either blank. Because washes for cars and trucks and mobile units share a code, very different formats feed these statistics.

The Tennessee wash study

A study for an express tunnel should test the road's traffic count and visibility, ease of entry and exit, competing tunnels within a short drive, the stacking length for a queue, utility and water-reclaim capacity, and the membership share of revenue. Equipment cost and life matter at a loan this size, as does the premise that growth in a suburb continues. Coverage should be tested with fewer washes per day and with a rival opening nearby, and the appraisal must split land and building from equipment.