SBA 7(a) Car Wash Feasibility Study in Virginia

A bimodal Virginia car wash book

Virginia's car wash loans range from small to very large: the middle half spans $135,000 to $3.0 million, a ratio of more than twenty to one between the quarters. The 45 loans total $68.2 million, and the midpoint of $765,000 is 0.97x the national 7(a) car wash midpoint. Virginia ranks 15 against other states in count, and car wash is 16 of 39 in the state's mix. Franchised loans are 6.7%. The spread suggests equipment-only requests sitting next to full tunnel builds.

Two holders at opposite ends

Manufacturers and Traders Trust Company: 7 loans, $2.8 million, small tickets on average. Hanmi Bank holds 5 loans for $17.4 million, an average ticket several times larger, so the two lenders occupy different ends of the range. Both are holders per SBA today. Loudoun County leads with 5 loans, Manassas City follows with 4, and Fairfax, Richmond City and Suffolk City have 3 each. FY2017 and FY2018 were the big years, with $12.7 million and $13.4 million, and FY2026, the latest complete year, shows 2 loans and $1.2 million.

Cancellation floors and the coding limit

At least 5.4% of Virginia car wash approvals dated through FY2024 were cancelled, and as many as 8.1% if undisbursed loans count as cancelled. Charge-offs go unpublished for Virginia because the funded cohort is thin. The industry code stretches over car, truck and mobile washing alike, so a few Virginia loans may serve larger vehicles or operators who drive to the customer.

What a Virginia car wash study has to show

A car wash is a traffic and throughput business, so the study begins with counts of passing vehicles, the number of competing washes, and the format: tunnel, in-bay automatic or self-serve. Throughput per hour, average ticket and the mix between single washes and monthly memberships determine revenue; the study should state its assumptions for each and explain the weather days that suppress them. Water, sewer and zoning approvals matter, as do reclaim systems and stormwater rules, and they can add real cost and delay. Equipment dominates the budget, so show life and replacement cost. Coverage must hold in a rainy season and when a competitor opens a membership offer. The appraisal should say what the site brings with a different use.