What DSCR is required for a car wash loan?
The SBA's floor for 7(a) loans is 1.15x debt-service coverage; most conventional lenders want 1.20–1.35x for a special-purpose property like a car wash. The ratio is only as honest as its numerator — computed on the seller's claimed EBITDA instead of the maintenance-capex-adjusted number, the same 1.25x standard can overstate supportable debt by 30% or more.
Direct answer
The SBA's floor for 7(a) loans is 1.15x debt-service coverage; most conventional lenders want 1.20–1.35x for a special-purpose property like a car wash. The ratio is only as honest as its numerator — computed on the seller's claimed EBITDA instead of the maintenance-capex-adjusted number, the same 1.25x standard can overstate supportable debt by 30% or more.
The sizing math
DSCR = sustainable cash flow ÷ annual principal and interest. On an underwritten $310K of capex-adjusted EBITDA at a 1.25x standard, supportable debt service is $248K — roughly $2.3M of debt at a 10% note on 25-year amortization. Run the same math on a claimed $450K and the "supportable" figure balloons to about $3.3M: ~$1M of phantom debt capacity created entirely by the EBITDA definition.
What lenders layer on top
- Special-purpose collateral scrutiny — a tunnel building has one economic use, so recovery value depends on the trade area and parcel, not the borrower's P&L.
- Saturation and supply pipeline — new tunnels permitted up the road are the most common exogenous shock to coverage.
- Membership durability — monthly churn and cohorts, not member counts.
Go deeper
Program terms, charge-off data from the SBA's loan-level record, and the five credit-committee questions are in the car wash loan underwriting guide; the buyer's side of the same math is the underwriting guide.
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WashIndex. (2026, May 24). What DSCR is required for a car wash loan?. https://washindex.com/q/what-dscr-is-required-for-a-car-wash-loan
WashIndex. "What DSCR is required for a car wash loan?." WashIndex. Last modified May 24, 2026. https://washindex.com/q/what-dscr-is-required-for-a-car-wash-loan.
"What DSCR is required for a car wash loan?." WashIndex, May. 24, 2026, https://washindex.com/q/what-dscr-is-required-for-a-car-wash-loan.
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title = {{What DSCR is required for a car wash loan?}},
author = {{WashIndex}},
year = {2026},
month = {May},
url = {https://washindex.com/q/what-dscr-is-required-for-a-car-wash-loan},
urldate = {2026-05-24},
} Grounded in the WashIndex dataset. Browse the full Q&A library or open the free tools.