Car Wash Feasibility Study Consultants for SBA 7(a) and 504 Loans

What a car wash feasibility study consultant does for an SBA loan

SBA car wash loan performance: the SBA Car Wash Lending Ledger

SBA does not publish loan performance by industry. The firm computes it from SBA’s loan-level FOIA files and publishes the results, so a credit reviewer can test a car wash file against the record of its class.

What the record does and does not say

A class-level loss rate below the SBA average is a reason a well-built car wash file can be approved, not evidence that a given wash will perform. The seasoned cohort is weighted toward the years before the express construction peak and before the 2026 slowdown in membership growth, so it describes a different market from the one a 2026 file enters. The study is where the specific trade area, site and capital structure decide the credit. Compare car washes with other property types in the SBA 7(a) charge-off rates by industry and the SBA Feasibility Risk Meter.

When an SBA lender orders a car wash feasibility study

No SBA rule makes a feasibility study mandatory for a car wash loan. 13 CFR 120.160(b) provides only that “SBA may require professional appraisals of the applicant’s and principals’ assets, a survey, or a feasibility study.” The decision rests with SBA, the 7(a) lender or the CDC. In practice, lenders and CDCs order a study in four situations. See also when SBA requires a feasibility study.

SOP 50 10 8.1 applies to loans receiving an SBA loan number on or after October 1, 2026. Loans numbered on or before September 30, 2026 remain under SOP 50 10 8. A study scoped under the prior version should be re-tested against the version that governs its loan number. The full rule set is summarized on the SOP 50 10 8.1 page, with equity sources in SBA equity injection sources and the acquisition record in SBA acquisition loan default analysis.

On a car wash acquisition, the study’s work is to prove the record. It:

• reconciles point-of-sale and membership-platform data to tax returns;
• separates membership revenue from retail;
• tests whether recent membership growth came from new members or from price increases;
• measures churn and tenure in the seller’s own data;
• prices the equipment replacement the buyer will inherit;
• identifies the loan amount the history supports.

A wash whose membership revenue grew mostly through price is a different credit from one that added members.

How to choose a car wash feasibility study consultant

A lender reads a car wash feasibility study to decide whether it can rely on it. Seven tests separate a study that survives credit committee and SBA review from one that comes back with questions. They apply to any consultant, including this firm. The general version is set out in how to evaluate a feasibility study.

1. 1. Membership modelled as cohorts, not a penetration target

   Gross additions, voluntary churn, payment-failure churn, price and wash frequency are projected separately and calibrated to published industry data.

2. 2. A named competitive and pipeline census

   Every operating wash, every project under construction and every permit or moratorium in the trade area is listed by name and format.

3. 3. Retail capture derived from the site

   Capture is built from traffic counts, turning movements, visibility, stacking and competing washes, not from a flat percentage of passing traffic.

4. 4. Coverage reported through the ramp

   DSCR is shown by year from opening, and the study identifies the month in which run-rate coverage clears the lender’s standard. Churn, conversion, price, retail volume and labor are stressed alone and in combination.

5. 5. Current SBA rule fluency

   The study applies the SOP version governing the loan number, the 8.1 acquisition tests, special-purpose equity, and the environmental starting point when fuel or service bays are present.

6. 6. Independence and a named signatory

   The study is addressed to the lender as intended user, the fee is fixed, and one accountable professional signs, with the analyst and reviewer named.

7. 7. Reconciliation with the appraisal, and willingness to say no

   Stabilized income is presented so that the going-concern appraiser can allocate it among land, building, equipment and intangibles. The published record includes findings of not feasible, or feasible only with conditions.

Who prepares your car wash feasibility study

Every car wash study issued by SBA Feasibility Study LLC is authored and signed by David Jones, MAI, CCIM, principal of the firm. Mr. Jones has completed more than 4,300 feasibility studies over his career, across car washes, fuel and convenience, hotels, self-storage, RV parks, multifamily and healthcare. The firm’s studies have been accepted by 534 SBA 7(a) lenders and 107 Certified Development Companies. The analyst and reviewer on each engagement are named in the report. The firm does not white-label its conclusions under another letterhead, and it does not issue unsigned drafts that later become the basis for a credit decision.

Consultant profile and methodology · SBA feasibility methodology · Sample report contents

Car wash engagement record

Determinations are the firm’s independent findings. Credit and eligibility decisions rest with the lender, the CDC and SBA.

View all engagements

What a car wash feasibility study consultant analyzes

Format comparison: firm planning ranges by format

Car washes are treated as special purpose properties under SBA lending rules. Tunnel conveyors, chemical delivery systems, water reclamation equipment, vacuum islands, and specialized drainage and water treatment all limit conversion to other commercial uses. SBA SOP 50 10 8.1 governs loans that receive an SBA loan number on or after October 1, 2026 (Information Notice 5000-882227, September 25, 2026). No SBA rule requires a feasibility study on every car wash loan: under 13 CFR 120.160(b), SBA may require one, and lenders and CDCs commonly order one where market saturation, a highly specialized property or an unproven concept is present. Before interest rates rose, new conveyor sites opened at a pace of at least 800 a year; industry estimates put 2024 at 600 to 700, and equipment makers expect 2026 tunnel production to fall a further mid-single digits (Professional Carwashing & Detailing). Zips Car Wash filed Chapter 11 on February 5, 2025 with about 260 locations, sought to close 41 of them, and emerged on April 30, 2025 owned by its lenders with about 230. On May 19, 2026, Leonard Green & Partners completed its take-private of Mister Car Wash at $7.00 per share, a $3.1 billion enterprise value.

Planning ranges are the firm’s starting points, not published benchmarks. Each study replaces them with site and market evidence.

The express exterior tunnel model dominates new development. Express builds account for the large majority of new conveyor construction, driven by higher throughput, lower labor dependency and the membership revenue model. This concentration means the feasibility study must evaluate competitive saturation specifically within the express segment, not car washes in general.

Wash count projections

Wash count is the fundamental volume metric for car wash feasibility, analogous to fuel gallons for a gas station or occupied room nights for a hotel. The projection must account for both drive-by traffic capture and membership-driven repeat visits. Many sites pair a wash with fuel, so we cross-check against our US gas station market report and the Buda fuel station and c-store case study.

Traffic-based baseline. We start with the average daily traffic count (ADT) on the road(s) fronting the site, sourced from state DOT data. For an express tunnel, retail capture typically falls between about 0.3% and 1.0% of daily traffic (a planning range the firm replaces with site evidence; no published study sets a standard capture rate), depending on visibility, access, speed limit, and competitive density; industry analysts caution that a flat 1% rule overstates many sites. A site on a 30,000 ADT arterial with good visibility and easy right-in/right-out access might capture 0.8%, producing a baseline of 240 cars per day before membership layering.

Membership volume layering. For express tunnels operating a membership model, the membership base generates predictable repeat volume independent of drive-by traffic. At an illustrative three washes per member per month, a site with 3,000 active members adds about 300 washes per day from members alone. The feasibility study models the membership ramp separately from drive-by traffic and projects the blended wash count month by month.

Seasonal adjustment. Car wash volume is seasonal in most U.S. markets. Winter months in northern states produce higher demand (road salt removal), while summer months produce higher demand in southern markets (pollen, dust). We apply regional seasonality factors to convert annual projections into monthly cash flow models that reflect the actual revenue timing lenders need to see. Snowfall days drive both retail washes and member frequency in salt-belt markets, so the ramp schedule depends on the opening month.

Revenue per car

Revenue per car (RPC) varies by wash model and market positioning. Our benchmarking draws on published industry data and comparable site performance in the target market.

The membership model changes car wash economics. A member paying $30 a month and washing three times produces an effective RPC of $10 (illustrative), lower than a single-wash customer paying $12. But the predictability and volume of membership revenue typically more than compensates, producing higher total revenue and better revenue visibility for DSCR projections. Recurring revenue improves visibility, but only when churn, tenure and price are proven; Rinsed estimates that up to half of recent membership revenue growth came from price increases. The trend is visible in same-store data: in Q3 2026, membership revenue rose 9.8% while retail revenue fell 9.6% (Rinsed, 3,000+ sites).

Membership and subscription economics

The shift from transactional to subscription revenue is the single most important structural change in car wash economics. A feasibility study that does not model the membership ramp, churn rate, and steady-state base is incomplete for any express tunnel project.

Membership ramp. The ramp is modelled from presale results, gross additions and churn; the calculator below shows how those inputs set the base month by month. Year 1 DSCR will be materially lower than stabilized DSCR, and SBA lenders need to see that the project can survive the ramp period.

Churn rate. Industry average monthly churn ran 7.3% to 7.9% from Q4 2025 to Q3 2026; in Q3 2026 it was 7.8%, of which 4.5 points were voluntary cancellations and 3.3 points payment failures (Rinsed). At 7.8%, a site must add about 234 new members a month just to hold a 3,000-member base. The study projects gross additions, voluntary and involuntary churn separately, and net membership, not just a target number.

Revenue predictability. Recurring membership revenue smooths monthly cash flow and directly strengthens the DSCR case, but it has to be proven. Retail-to-member conversion rises with scale (17.1% at sites with more than 4,000 members, 10.7% at 2,000 to 4,000, and 3.3% below 2,000 in Q3 2026), and the median member stayed about 14.5 months in Rinsed’s Q4 2024 report. We model member cohorts, conversion, and tenure so the stabilized revenue a lender relies on is built from observable behavior, not an assumed penetration rate.

Equipment replacement reserve. Conveyors, brushes, dryers, pay stations, and reclaim systems wear out on different schedules. Conveyors, brushes, controllers and pay stations wear on different schedules, and the study prices replacement from the equipment schedule and service records. The financial model carries a replacement reserve and shows DSCR before and after it, because a coverage ratio that only works without the reserve is not lender-grade.

Sensitivity and stress testing. Every study includes a DSCR matrix that flexes retail capture, member count, churn, average membership price, and labor, alone and combined. For changes of ownership under SOP 50 10 8.1, where coverage is tested on historical earnings, we reconcile our normalized earnings to the figures the lender will use. See DSCR for SBA loans and the financial projections and DSCR methodology. See the October 2026 SBA feasibility monitor for current rule changes and our analysis of whether SBA acquisition loans default more; the special-purpose property guide covers the 504 equity step-up, and environmental due diligence covers wastewater and prior-use risk.

The membership equation, and why churn sets the ceiling

A membership base converges on a steady state equal to monthly gross additions divided by monthly churn. At the Q3 2026 industry average churn of 7.8 percent:

• every 100 new members a month supports about 1,280 members at maturity;
• 350 new members a month support about 4,490, close to Mister Car Wash’s Q1 2026 average of roughly 4,500 members per location.

A one-point rise in churn, from 7.8 to 8.8 percent, lowers the steady-state base by about 11 percent with no change in sales effort. That is why the study models gross additions, voluntary churn and payment-failure churn separately, and reports the churn rate at which coverage fails.

Membership ramp and opening-year coverage

A new express wash opens with few members and converts retail customers slowly, because conversion rises with scale. In Q3 2026, sites below 2,000 members converted 3.3 percent of retail customers, against 17.1 percent at sites above 4,000 (Rinsed). Labor, utilities, insurance, property taxes, software and debt service run at full weight from opening. The same ramp logic applies to new construction feasibility generally, and the Las Vegas self-storage case study shows a comparable lease-up model; projections follow our financial projection methodology.

The study therefore:

• models the member base month by month from presale through maturity;
• reports coverage by year from opening;
• identifies the first month in which run-rate coverage clears the lender’s standard;
• sizes the interest reserve and working capital needed to carry the deficit until then.

The ramp is tested against the conversion rate of a sub-2,000-member site, not that of a mature one.

In the illustrative case below, coverage runs at 0.47x in year one and 1.57x in year two before stabilizing at 2.23x, and run-rate coverage first clears 1.25x in month 14. A loan sized on the stabilized figure without a reserve for the first year would not survive opening.

Trade area, saturation and pipeline

Car wash trade areas are tighter than most commercial properties. An express tunnel’s primary trade area is typically a 3 to 5 mile radius (or 5 to 8 minute drive time) in suburban markets. In dense urban areas, it may shrink to 1 to 2 miles. The secondary trade area extends to 5 to 8 miles but captures a much lower share of the population.

We inventory every car wash within the primary and secondary trade areas, classifying each by format (express, flex-serve, full-service, self-serve, in-bay automatic), brand affiliation, pricing, estimated throughput, observable condition, and any known expansion plans. The critical competitive question for express tunnels is saturation, and we compare express washes per 10,000 households, and members per site, against comparable markets. See our market analysis methodology.

Pipeline supply is especially important in car wash analysis. Many markets have new sites under construction or in permitting, and a trade area that appears undersupplied today may be oversupplied 12 months from now. We check local planning department records for pending car wash permits and cross-reference against construction activity visible on satellite imagery and site visits.

No published standard sets a households-per-site or drive-time saturation threshold, so the firm does not apply one. It benchmarks the trade area against comparable markets where operators perform and where they do not. Professional Carwashing & Detailing cited Colorado Springs, with 73 conveyor washes for about 750,000 residents (roughly one conveyor per 10,300 people), as an overbuilt submarket in 2026. The pipeline census includes permits, projects under construction, and municipal moratoria in the subject’s jurisdiction and its neighbours (see Exhibit 5).

Water reclamation and environmental requirements

Water usage and reclamation are not just environmental considerations; they are operating cost drivers that directly affect the financial model. EPA’s WaterSense guidance notes a friction conveyor uses about 65.8 gallons per vehicle without reclaim and as little as 7.8 with it (EPA WaterSense at Work, 2012, from ICA data collected 2000–2002). The International Carwash Association’s WaterSavers program recognizes washes that limit fresh water to 40 gallons per vehicle or less.

Reclaim is mandatory in some jurisdictions: California Water Code Section 10951 requires in-bay and conveyor washes permitted and constructed after January 1, 2014 to recycle at least 60% of wash and rinse water, or to use supplier-provided recycled water for at least 60%, and some cities require recycling systems on all new conveyor washes. Reclaim system cost is quoted for each project and carried in the development budget. The feasibility study models utility costs with and without reclamation where relevant, and confirms whether local ordinances mandate it.

Discharge permitting is another regulatory variable. There is no federal effluent guideline specific to car washes; instead, discharges to the sanitary sewer fall under the federal pretreatment rules (40 CFR Part 403) and the local sewer authority’s limits, discharge to storm drains must be avoided, and sites typically need grit traps and oil-water separators pumped out by licensed haulers. These requirements are confirmed during the site and regulatory assessment.

Car wash feasibility by format

2026 market evidence for car wash credits

Every figure carries its source and period. The firm updates this section when a primary release changes the answer. The full narrative is in the US Car Wash Industry Outlook 2026 to 2030.

Car wash feasibility study vs market study vs appraisal

See also feasibility study vs business plan and what to expect in the report.

How car washes are valued: appraisal methodology and standards

The feasibility study and the appraisal answer different questions, but in an SBA file they have to agree. The study tests whether the wash can generate its projected cash flow; the appraisal converts that cash flow into value, allocates it, and sets the collateral position.

The standards behind the file

The appraisal follows USPAP (2024 edition, which has no fixed expiration date); Standards Rule 1-4(g) requires the appraiser to analyze personal property and intangible items included in the appraisal, which always applies to an operating car wash. For federally regulated lenders, the Interagency Appraisal and Evaluation Guidelines bar using going concern value or value in use as market value; those values may be reported separately only if clearly identified. SBA’s going-concern appraisal rules call for a Certified General appraiser with recent going-concern experience on equivalent special-use property (language carried in SOP 50 10 8; confirm in 8.1) and separate values for land, building, equipment, and intangible assets.

Income approach

For an operating wash, appraisers place the most weight on income. Stabilized net operating income is built from retail and membership revenue, less chemicals, utilities, labor, repairs, a market management fee, and an equipment replacement reserve. Income multipliers (gross income and EBITDA) are widely used alongside direct capitalization. Net-lease car wash cap rates are a reference point, not a substitute: listed net-lease washes averaged a 6.21% asking cap rate across 190 listings in April 2026 (B+E data cited by Raymond James, Spring 2026) and about 6.32% in July 2026, but those rates price a long-term corporate lease, not owner-operator risk. New builds use a discounted cash flow that captures the membership ramp.

Sales comparison approach

Units of comparison include EBITDA multiple, revenue multiple, price per car washed, and price per square foot; per-square-foot pricing gets only limited weight because it ignores throughput and membership. Mister Car Wash’s 2026 take-private implied about 9 times 2025 adjusted EBITDA (Raymond James, Spring 2026). Adjustments address membership share and churn, tunnel length and equipment age, competitive pipeline, access and visibility, and property rights conveyed (fee simple versus leased fee versus business-only).

Cost approach

Land plus the replacement cost new of the building, tunnel equipment, vacuums, pay stations, and reclaim systems, less physical deterioration, functional obsolescence (short tunnels, single-lane pay stations, poor stacking), and external obsolescence. In oversupplied trade areas, the gap between depreciated cost and income-based value measures external obsolescence, and the study’s competitive pipeline census is the evidence for it. A going-concern value below depreciated cost is a warning sign that the improvements may not be the highest and best use.

Allocation: real estate, equipment, and intangibles

Car washes are a textbook going concern: real estate, machinery and equipment, and business value combined (ASA course RP401 names car washes explicitly). One accepted method values the real property at a market net-lease rent and treats the operating business as what remains after paying that rent. Equipment is a large share of a tunnel’s value, and the membership base, brand, and workforce sit mostly in business intangibles. The allocation shapes the SBA loan directly: real estate supports up to a 25-year term while equipment and goodwill carry shorter terms, and under SOP 50 10 8.1 change-of-ownership loans use a blended weighted-average maturity.

Highest and best use and conversion

Every appraisal tests highest and best use as vacant and as improved: legally permissible, physically possible, financially feasible, and maximally productive. For a wash, the as-improved test weighs continued operation against conversion to another use, net of equipment removal and site work. The feasibility study supplies the financially feasible test, which is why lenders read the two reports together.

SBA eligibility and structure checklist for car wash loans

Program detail: SBA 7(a) feasibility study, SBA 504 feasibility study, 7(a) vs 504 and the CDC compliance guide. On a $4 million express tunnel project, the difference between 10% and 20% equity is $400,000.

Engaging the firm: process, fee and timeline

1. 1. Scoping call

   15 minutes, no cost.

2. 2. Written proposal within one business day

   Scope, method, timeline, firm fixed fee and acceptance guarantee terms.

3. 3. Engagement

   Engagement letter; structured data request within one to two business days; mid-point findings review on substantial engagements; delivery; support through lender acceptance.

Car wash studies are quoted at $4,900 to $14,000, fixed before work begins. Single-format express tunnels in well-documented markets sit at the lower end. Multi-format sites, data-sparse markets and trade areas that need extensive pipeline research sit at the upper end. Delivery runs 7 to 12 business days from a complete data response. The fee does not depend on the conclusion or on whether the loan closes. Every inquiry is answered within one business day. See the cost and timeline guide and the feasibility study checklist.

Data request checklist

• Site address and parcel; traffic counts, if held.
• Site plan: lanes, stacking, tunnel length, vacuums, ingress and egress.
• Format and equipment package quotes.
• Brand or franchise proposal, if any.
• Development budget or purchase contract.
• Proposed loan structure, SBA program, and lender or CDC.
• For existing washes:
  • three years of P&L statements and tax returns;
  • point-of-sale and membership-platform exports (members, gross additions, cancellations, payment failures, price history, wash counts by package);
  • utility bills;
  • equipment age and service records.
• Water permits and reclaim specifications.
• Any appraisal, Transaction Screen or Phase I already in the file.
• Sponsor’s car wash operating experience.

Car wash feasibility study FAQ

More answers: SBA feasibility study FAQ and the glossary. Background: SBA car wash feasibility study guide and how much car washes make.

How this page is verified

Program rules are checked against 13 CFR Parts 120 and 121 and SBA SOP 50 10 8 and 8.1. Every market figure names its source and date. Last verified October 26, 2026.

Sources

• eCFR, 13 CFR 120.160, 120.910, 120.931, 120.151, 120.111 and 120.212 (current) — https://www.ecfr.gov/current/title-13/chapter-I/part-120
• U.S. Small Business Administration, Information Notices 5000-880695 (August 14, 2026) and 5000-882227 (September 25, 2026) — https://www.sba.gov/document/information-notice
• U.S. Small Business Administration, SOP 50 10 page (updated October 7, 2026) — https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs
• SBA Office of Capital Access, franchise directory certification notice (December 23, 2025) — https://www.sba.gov/document/support-sba-franchise-directory
• Federal Register, 91 FR 53741, proposed size standards (August 20, 2026) — https://www.federalregister.gov
• NAGGL, SOP 50 10 8.1 summaries (August 14 and September 25, 2026) — https://www.naggl.org
• Doeren Mayhew, SOP 50 10 8.1 commentary (August 2026) — https://www.doeren.com
• EBIT Community, SOP 50 10 8.1 commentary (August 2026) — https://www.ebitcommunity.com
• Starfield & Smith, SOP 50 10 8.1 commentary (September 2026) — https://www.starfieldsmith.com
• Cantrell, SOP 50 10 8.1 commentary (October 2026)
• Rinsed, quarterly car wash industry reports: Q4 2025, Q1 2026, Q2 2026 and Q3 2026 (January 26, April 22, July 22 and October 21, 2026) — https://www.rinsed.co
• CarwashPro (July 29, 2026) — https://www.carwashpro.com
• Mister Car Wash, Q4 2025 release (February 18, 2026), Q1 2026 Form 10-Q (April 29, 2026) and Form 8-K (May 19, 2026) — https://www.sec.gov
• Cleary Gottlieb, Mister Car Wash take-private transaction note (2026) — https://www.clearygottlieb.com
• Zips Car Wash, Business Wire releases (February 5 and May 1, 2025); CoStar coverage — https://www.businesswire.com
• Driven Brands, investor release (February 25, 2025); CollisionWeek — https://investors.drivenbrands.com
• Professional Carwashing & Detailing, State of Carwashing and industry coverage (2024–2026) — https://www.carwash.com
• B+E, NNN Car Wash Listed Inventory (April 2026); Raymond James, Car Wash Insight (Spring 2026) — https://www.raymondjames.com
• U.S. EPA, WaterSense at Work, Section 5.5 (2012) — https://www.epa.gov/watersense
• California Water Code §10951 (AB 2230, 2012) — https://leginfo.legislature.ca.gov
• eCFR, 40 CFR Part 403, general pretreatment regulations — https://www.ecfr.gov/current/title-40/part-403
• Moratoria: City of Bloomington; MyRGV; C&G Newspapers; Carson, CA and Trussville, AL city council records
• U.S. Small Business Administration, 7(a) and 504 FOIA loan-level data (as of March 31, 2026) — https://data.sba.gov

Changelog