Worked Example: Conventional Bank Gas Station Feasibility Study in Missouri

This is a worked example, not a client engagement. It follows an invented owner who holds about 1.5 acres on a state highway corner in Lincoln County, Missouri, and wants to raze an aging fuel and convenience station and rebuild it as a larger store, using a loan from a community bank instead of an SBA or USDA guarantee. It is written for the borrower deciding what to bring to the bank and the banker deciding what to lend. No station, owner, lender, brand, town or address is a party to it; the chains named below are public comparables only.

At a glance. An assumed 2,800 square foot store with eight fueling positions replaces the old station on land the owner already holds, financed by a conventional construction-to-permanent bank loan. Coverage passes comfortably, but the bank's value limit, not coverage, sizes the loan, and on the study's own value the request is too large by that limit.

• Total project cost: $3,845,469
• Conventional bank loan (the sponsor's request): $1,560,000
• Borrower equity (land at appraised value plus cash): $2,285,469
• Stabilized cash flow available for debt service: $294,193
• Debt service coverage at stabilization: 1.93x
• Break-even volume at 1.00x (percent of base case): 85.3%
• Volume needed for the lender's 1.25x minimum (percent of base case): 89.2%

What a Feasibility Consultant Tests First on a Missouri Station Rebuild

A banker reading a raze-and-rebuild request asks two separate questions, and a feasibility consultant has to answer both with different evidence. The first is whether the store's cash flow carries the debt. The second is whether the finished property is worth enough to sit behind the loan if the cash flow does not arrive. On a conventional loan the second question is usually the sharper one, because the bank holds the real estate and little else. A station owner thinks of the business as the asset: the customers, the coolers, the kitchen. STAX Real Estate, a station broker, says in its financing guidance that a conventional lender treats a station's goodwill and equipment as unsecured ^[1]. What the bank can sell after a default is a small building, a canopy, a set of tanks and a corner lot.

This case is built around that gap. The interagency real estate lending guidelines that bind an FDIC-supervised bank ask each bank to set its own minimum for debt service coverage and set no figure themselves ^[2]. The example therefore uses a stated lender assumption of 1.25x; since no program floor exists for a loan of this kind, that assumption is the binding minimum. The case then tests value against the supervisory loan-to-value limit, which does carry a figure, and that second test is where this project is tight.

The guidelines expect both analyses. Among the items a bank's lending policy should address for development and construction lending, they name feasibility studies and risk analyses with sensitivity tests, for example of income projections to interest rates and operating expenses ^[3]. The sponsor's pro forma, built on market averages, is kept apart from the study's base case, because a banker wants to see which numbers the borrower supplied and which the analyst changed.

The project is fixed before any number is run. The old station sits on land the borrower already owns, and the land counts toward the borrower's equity at its appraised value, which is how the federal capital rules treat contributed real property ^[4]. The old tanks must be closed whatever the owner decides, since permanent closure carries a federal 30-day notice and a release check before it is complete ^{[5] [6]}. The consultant's job is to say what the rebuilt store would sell, what it would cost, what a bank would lend against it and what the owner would have to add.

Decision. The study tests the loan against two ceilings, coverage and value, and sizes it on whichever binds first; on this project value binds, and the last section shows the loan the bank could write.

The Missouri Market and the Lincoln County Region

Missouri is a slow-growth state with a fast-growing exurban edge. By the Census Bureau's Vintage 2025 series, Missouri held 6,270,541 residents on July 1, 2025, about 1.9 percent above the April 2020 estimates base of 6,154,913 ^[7]. Lincoln County, on the northern side of the St. Louis region, held 66,676 on the same date, about 11.9 percent above its 2020 base of 59,564 ^[8]. A county that grew six times as fast as its state is the reason a raze-and-rebuild is plausible on this corner, though growth alone does not set the store's sales and the study does not let it.

The industry backdrop favors replacing old sites. The 2026 NACS and NIQ TDLinx count put U.S. convenience stores at 151,975, down 280, while stores selling fuel rose by 768 to 122,620, the most in eight years ^[9]. NACS's managing director of research said in August 2026 that closures often mean older, unprofitable sites no longer meeting today's standard have gone offline to make room for newer stores ^[10].

Fuel prices set the scale of revenue without setting profit. AAA's Missouri average for regular gasoline was $3.6394 a gallon on November 11, 2026, against $2.6980 a year earlier, and its diesel average was $5.8691 against $3.4140 ^[11]. Those pump prices include taxes ^[12], which in Missouri total 29.5 cents a gallon after a step up on July 1, 2025 ^[13]. The regional price is volatile: EIA put the Midwest average for regular at $3.868 on November 9, 2026, which was 23.4 cents below the previous week ^[14]. A retailer earns the margin between wholesale and retail, so the study models cents per gallon rather than gallons times price.

The margin is the variable a lender should respect. Retail gross margin on gasoline, per OPIS figures that NACS cites, was 39.7 cents a gallon in 2025, with a five-year average of 38.3 cents before expenses, the figure the study assumes for its base case ^[15]. OPIS MarginPro data cited by NACS also show 29.9 cents in 2021, 42.9 cents in 2022, 39.4 cents in 2023 and 39.7 cents in both 2024 and 2025 ^[16]. The study takes the five-year average for a 20-year loan, since one year is one draw from a volatile series, and prints a sensitivity column at the 2021 low.

Labor rules and cost pressure are the other regional inputs. Missouri's minimum wage rose to $15.00 an hour on January 1, 2026 ^[17], while NACS reported that store-level hourly wages averaged $15.04 nationally in 2025 ^[18]. A national average is a thin basis for a Missouri base case, and the wage is the one place where the study departs from the market figures. NACS research staff also warned in August 2026 that store operating costs have climbed faster than pretax profit over five years ^[19].

Supply and Public Comparables: Who a Lincoln County Corner Competes With

A rural fuel corner meets two kinds of operator: the regional chain that builds large stores and distributes its own fuel, and the fuel-forward chain that sells gallons at thin margins from small boxes. Both are public companies, which makes them useful comparables and keeps them out of the case as parties.

Casey's General Stores, a listed Midwest retailer, ran 2,944 stores across 19 states as of April 30, 2026, about half of them in Iowa, Missouri and Illinois and about 71 percent in places of fewer than 20,000 people ^[20]. A Lincoln County corner is that chain's native setting. Casey's also supplies most stores from three distribution centers, one of them in Joplin, Missouri, and self-distributes the majority of the fuel its stores sell ^[21]. That integration is part of why its margins are not the market's: Casey's reported a 58.6 percent margin on its prepared food and dispensed beverages in fiscal 2026 ^[22], far above the 31.5 percent blended inside margin the study assumes for an independent. Casey's replaces some stores at the same location by razing and rebuilding them ^[23]. The project type in this example is one the chain itself uses.

Murphy USA, a listed fuel-forward chain, builds a mix of 1,400 square foot raze-and-rebuild stores and new-to-industry stores of the same 2,800 square feet that this study assumes ^[24], plans up to 30 raze-and-rebuilds a year ^[25], and operated 50 stores in Missouri at December 31, 2025 ^[26]. Murphy USA's 2025 figures were a fuel margin of 28.1 cents on about 2.83 million gallons a store year ^[27].

Store size matters to the format choice. NACS describes the limited selection store as 1,500 to 2,200 square feet, often tied to an oil company, with foodservice limited to a roller grill ^[30]. NACS describes the expanded store as a range from the study's assumed 2,800 square feet to an assumed 3,600, with room for more grocery shelving or significant foodservice and seating ^[31]. An older Lincoln County station is almost certainly in the first class; the rebuild moves it into the second, at the bottom of the range.

The comparison that does the most work is Table 2, which sets the study's rebuilt store against the Casey's average store for fiscal 2026. The study's annual gallons are 81.1 percent of the chain's and its inside sales are 102.1 percent of the chain's, but its gross profit is 77.1 percent of the chain's. The study assumes a fuel margin of 38.3 cents against the chain's 42.57 cents, and an assumed inside margin of 31.5 percent against the chain's 40.7 percent. The expense side is in line with the chain's, so the gap is entirely in gross profit. The study's store EBITDA is 55.5 percent of the chain's average store operating income. A lender's first question, whether an independent can earn chain margins, does not decide this case, since the store covers its debt without them.

Demand: Residents, Gallons and Inside Sales

Demand for a fuel corner has three layers: passing traffic, residents who use the corner as a local stop, and the habit of buying food inside. The study could source only the second. The Missouri Department of Transportation's traffic count page returned an empty body, so the research stopped there and the case has no corridor count and says so. A lender should treat traffic as the open item that the appraisal or an engineer's count must fill.

What can be sourced is household demand. FHWA's Table MF-21 reports 2024 highway use of 2,969,823 thousand gallons of gasoline in Missouri ^[32]. Divided by the state's population, that is the 476 gallons a resident printed in Table 3. Applied to Lincoln County's residents it gives about 31,715,308 gallons a year, and the rebuilt store's base case gasoline of 888,527 gallons is 2.8 percent of that. A store that needs under three percent of its county's household gasoline to reach the volume the study assumes is not asking for an implausible share.

The store's own volume is taken from NACS rather than invented. NACS reported 322 fueling transactions a day for the average store in 2025, at 8.4 gallons a transaction, about 2,705 gallons a day ^[33]. The study's volume index is an assumed 100 percent of that average store because no corridor count, old-station gallons or site-level margin is sourced, and the county's growth supports demand at least at the average without putting a number above it. Eight fueling positions serve those 322 daily fills, about 338 gallons per position per day as the revenue table prints.

Inside sales come from the same industry average. NACS reported in-store sales of $341.2 billion in 2025 ^[34], and the NACS and NIQ TDLinx count of 151,975 stores ^[9] turns that into average inside sales of $2,245,106 per store. NACS also reported that foodservice supplied 28.5 percent of in-store sales yet 38.9 percent of in-store gross profit dollars ^[35], so the study splits the blended margin into a merchandise margin and a higher foodservice margin. That split is what lets the assumed 2,800 square foot format earn its extra space: the old limited selection store had a roller grill at most, and the rebuilt store has room for the item that carries the larger share of inside profit.

The Site: Razing an Older Station and Closing Its Tanks

The site is about 1.5 acres on a state highway corner in a small Lincoln County town. An assumed $750,000 is credited as the owner's land contribution at its appraised value; no Lincoln County land price is sourced, so the figure is a judgement, and a reader with a better one should replace it and watch Table 6 move.

Closing the old fuel system is the first piece of work and the one most likely to surprise the budget. Federal rules require the owner to notify the implementing agency at least 30 days before beginning permanent closure of an underground tank ^[5] and to measure for a release where contamination is most likely before closure is complete ^[6]. EPA approved revisions to Missouri's program in May 2024, and the program is run by the Department of Natural Resources ^[36]; the approval maps the federal closure element to Missouri rules 10 CSR 26-2.060 through 2.064 ^[37]. The cost lines are assumptions with no anchor beyond those rules: demolition of the old store, canopy and paving at $90,000, removal and closure of the old tanks and piping with the closure site assessment at $65,000, and an environmental allowance of $40,000.

Missouri's state tank fund is what makes the allowance defensible. Under RSMo 319.131 a tank owner may elect to participate in the Petroleum Storage Tank Insurance Fund to meet financial responsibility requirements ^[38]. A claimant bears the first $10,000 of cleanup cost and the fund pays above that up to $1 million per occurrence ^[39]. The fund pays for contamination from participating tanks regardless of when the release occurred ^[40], and existing contamination does not by itself bar an owner from joining ^[41]. The fund does not compensate for lost business ^[42], so the weeks the corner is dark are the owner's cost. The study assumes the old tanks participate; if they do not, the allowance is the first line to fail.

The new system meets a stricter standard: tanks and piping installed or replaced after April 11, 2016 must be secondarily contained and use interstitial monitoring ^[43]. The study prices the new fuel system at an assumed $370,000 fixed part for tanks, piping, sumps and monitoring plus an assumed $80,000 for each dispenser with its island and canopy bay; neither has a public anchor.

The site matters to a lender because of recovery. STAX says a fuel site with a canopy and tanks has fewer alternative uses than a generic retail building, so recovery in a default is narrower ^[44], and that underground tanks make lenders cautious because contamination can exceed the value of the collateral and can attach to a lender that forecloses ^[45]. Both are why the study does not treat the going-concern value as if it were real estate.

Decision. The study carries old-system closure and the soil allowance as separate cost lines rather than burying them in contingency, because they are the items a bank's environmental reviewer reads first.

Conventional Bank Rules: Loan-to-Value, Equity, HVCRE and Coverage

The loan here is a conventional one from an assumed FDIC-supervised community bank, construction to permanent, fixed for five years at the 5-year Treasury plus an assumed spread of 3.00 points, then reset, amortized over an assumed 20 years. On November 6, 2026 the 5-year Treasury constant-maturity rate stood at 4.64 percent ^[46], which gives the quoted note rate of 7.64 percent in Table 11. STAX observes that real estate collateral often decides between a ten-year and a twenty-five-year schedule ^[47]; the 20-year schedule sits inside that range.

The rules that matter are the supervisory limits. The interagency guidelines tell banks to set internal loan-to-value limits no higher than the supervisory limits, set at eighty percent for commercial construction and higher for improved property ^[48]. Under the same guidelines, value means the market value of the real property in an appraisal or evaluation ^[49], and the FDIC's appraisal rule requires a State certified appraiser once a commercial transaction passes $500,000 ^[50]. The model therefore sets the bank's caps on loan to value and loan to cost at an assumed eighty percent each.

Equity has two layers. The bank's own policy sets a floor on hard equity for development and construction projects, for example cash or an unencumbered investment in the underlying property ^[51]. And the capital rules price thin equity. A commercial construction loan escapes the high volatility commercial real estate class when its loan-to-value ratio does not exceed the supervisory maximum and the borrower has put in capital worth 15 percent or more of the property's appraised as-completed value ^[52], in place before the bank advances funds ^[53]. Otherwise the bank assigns a 150 percent risk weight ^[54], though the bank can move the exposure out of that class after the building is substantially finished and its cash flow supports the debt ^[55]. This binds banks on the risk-based capital rules; the study did not source the community bank leverage ratio option. STAX adds that SBA programs generally require a buyer to inject 10 to 20 percent equity and that conventional lenders typically want more ^[56].

This example assumes a cap on the borrower's equity: it is the larger of an assumed thirty-five percent of cost and whatever the bank's own loan-to-cost or loan-to-value limit requires. Here the bank's limit requires more, so the cap is the bank's requirement. No program floor applies to a conventional loan, and the guidelines name no coverage figure ^[2]; the lender's assumed minimum is the only coverage test and the binding minimum in every table that follows. Table 4 lists every assumption and flags each one.

Rounded to the dollar; lines may not foot by $1.

What the Rebuild Costs: Uses and Funding

Table 5 builds the project from the ground up, and every line is either sourced or labelled a judgement. The one sourced hard cost is the building. In its third-quarter 2026 survey, Rider Levett Bucknall puts Chicago strip retail at $170 to $280 a square foot ^[58], measured as hard construction cost over gross floor area ^[57]. Chicago is the report's nearest listed Midwest market, and strip retail its nearest class to a store shell. The study prices the building at the midpoint of that range, a line of $630,000, and treats the store and foodservice equipment as a separate assumed line of $308,000 at $110 a square foot.

The other lines are the study's judgements. Site work is an assumed $570,000 for utilities, stormwater, access, parking, forecourt paving and islands; the fuel system is an assumed $690,000; design, survey and permits run an assumed 5.5% of hard costs; and the contingency is an assumed 8%, above a ground-up allowance because razing an old fuel site carries unknowns. Third-party reports, closing and financing costs are an assumed $65,000. Opening inventory is an assumed $175,000, and pre-opening costs and working capital are an assumed $130,000, about two months of fixed costs, against a reserve of three to six months of fixed costs that NACS research staff recommend ^[59].

Two lines depend on the loan itself. Interest during construction is computed on the loan at the note rate for an assumed nine months with an assumed 50% average draw, and the bank's origination fee is an assumed 0.75% of the loan. At the sponsor's request of $1,560,000 these come to $44,694 and $11,700, so total project cost is $3,845,469. Equity is $2,285,469, which is 59.4% of the total: the assumed land contribution of $750,000 plus $1,535,469 of cash. The loan is 40.6% of cost.

That equity share is high because of how the request was sized, and Table 6 shows the steps. The sponsor's cash flow would carry a much larger loan, but the bank's cap on the sponsor's own as-completed value is the smaller number, so that cap sets the request, rounded down to $10,000. A thirty-five percent equity share would need a loan of $2,522,163, which the value limit does not allow. The equity the bank's limit requires is exactly the equity the sponsor brings, so none of it sits above the cap.

Concept choice is the other part of the cost story. The study tested a larger format first, an assumed 3,600 square foot store with twelve fueling positions at the top of the NACS range. Table 7 shows that concept costs $4,420,770 and needs equity of 70.6% of cost, with $2,370,770 of cash beyond the land, and its as-completed value is only 36.8% of cost. It adds 800 square feet and four fueling positions to a store whose sourced sales are the market average, so the extra cost buys no sourced revenue, and the study did not bring it. The smaller concept costs $3,845,469, needs 59.4% equity, and is worth 51.0% of cost on the sponsor's figures.

Decision. The study carries concept 2, the smallest format that fits the project type, because the larger store adds cost with no sourced added sales and lowers the value-to-cost ratio.

The Pro Forma: Revenue Build, Ramp and Operating Statement

The pro forma appears twice, the sponsor's and the study's, and they differ in one input. The sponsor prices store labor at the NACS 2025 national average of $15.04 an hour ^[18]. The study prices it at an assumed $16.25 because Missouri's minimum wage was $15.00 from January 1, 2026 ^[17], and a store's average across associates, shift leads and cooks sits above the state floor. Everything else is at the market figures in both columns: gallons, inside sales, fuel margin and inside margin. The base case is therefore not discounted from the market, because no site evidence moves the other inputs; the place a new store's shortfall shows is the ramp.

Table 8 builds revenue. Annual gallons are 987,252, of which an assumed 10 percent is diesel at the dispensers, with no truck island. Gasoline sales are $3,233,704 and diesel sales $579,428 at the AAA pump prices, for fuel sales of $3,813,133. At an assumed 38.3 cents a gallon, the five-year OPIS figure cited earlier, fuel gross profit is $378,118. Inside sales of $2,245,106 split into merchandise and foodservice using the NACS shares, with margins of 26.9% and 43.0% that blend to an assumed 31.5%, the central value of the 28 to 35 percent range STAX gives for a station's inside gross profit ^[66]. Other income, such as lottery commissions, ATM and air and vacuum, is an assumed $35,000. Total revenue is $6,093,239 and total gross profit $1,120,326, of which fuel supplies 33.8%.

Table 9 is the operating statement. Card fees are $157,848, computed at the industry rate from NACS's $21.3 billion of card fees ^[68] over $817.5 billion of total convenience sales ^[69]. Store payroll, taxes and benefits are $357,773 in the study and $331,133 in the sponsor's version; the assumed 16% load for payroll taxes, workers compensation and benefits reflects NACS's report of a 4.2 percent rise in 2025 in what stores paid in wages and benefits, driven by workers compensation and by health insurance and other benefits ^[74]. Utilities are $43,352, using Missouri's commercial electricity price of 12.63 cents a kilowatthour in August 2026 ^[72]. Insurance is $28,024 and includes the tank pollution coverage.

Property tax follows Missouri's classes. Commercial real property is assessed at 32 percent of true value ^[77], and personal property at one third of true value ^[78]. The county levy could not be sourced because the State Tax Commission and State Auditor pages sat behind bot challenges, so the study assumes $6.50 per $100 of assessed value, a judgement and a weak point. Real property tax comes to $43,930 and personal property tax to $8,407.

Owner pay is a line bankers adjust. The statement carries an assumed $72,000 for the owner-manager, paid as a hired manager would be, because STAX excludes only owner pay above market from the EBITDA its multiples apply to ^[62]. Store EBITDA before the reserve is $314,193 in the study and $340,833 in the sponsor's version. After the assumed $20,000 replacement reserve, cash flow available for debt service is $294,193 in the study and $320,833 in the sponsor's version.

A sponsor would bring this project for reasons the coverage figures only hint at. The land is already the owner's and the old tanks must be closed whatever is decided, so the real choice is between closing the corner and rebuilding it. The rebuild leaves the owner cash flow after debt service of $141,779 in the study and $168,420 on the sponsor's figures, which is 9.2% and 11.0% a year on the $1,535,469 of new cash, besides the manager pay. The owner gives something up too: on the study's value the finished store is worth 47.0% of its cost, so the owner builds to operate, not to sell.

The ramp is where the base case sits below the sponsor's. The rebuilt store reopens after the build and wins back the old station's customers over two years, at an assumed 85% of stabilized volume in the first year and 95% in the second. Table 10 shows cash flow available for debt service of $149,821 in Year 1, $246,069 in Year 2 and $294,193 at stabilization, and coverage of 0.98x, 1.61x and 1.93x. Year 1 falls $2,592 short after debt service, inside the assumed working capital the cost table funds. A banker would read that as a tight first year, not a failing one.

Debt Service Coverage, Sensitivity and Break-Even

Table 11 sets the sponsor's request of $1,560,000 against both cash flows. Annual debt service at the 7.64% note rate over 20 years is $152,414. The study's cash flow of $294,193 gives coverage of 1.93x, and the sponsor's cash flow of $320,833 gives 2.11x. The study's cash flow stands $103,676 above the binding minimum. The coverage test passes: the assumed lender minimum binds, no program floor applies, and the base case clears it with room.

Value is the second test. STAX values an operating station as annual EBITDA times a market multiple ^[61], and says an owner-operated station is bought as a business that sits on real estate and is priced off its earnings ^[84]. For an unbranded or independent station sold with its real estate, STAX gives a Tier 2 band of 5.5x to 7.0x, and says the band includes the real estate ^[63]. STAX's tiers are Florida metros ^[64], and a small-town corner is closest to its tertiary and rural class, which runs about half a turn under Tier 2 ^[65]. That leaves a band of 5.00x to 6.50x with a central value of 5.75x, as the sizing table prints. The study applies the central multiple to store EBITDA before the reserve.

On the sponsor's figures that gives an as-completed value of $1,959,791, which is 51.0% of total project cost, and the request is 79.6% of it, inside the supervisory limit. On the study's EBITDA of $314,193 the value is $1,806,609, or 47.0% of cost, and the request is 86.3% of it, over the limit. The largest loan inside the limit on the study's value is $1,445,287, and the sponsor would add $114,713 of equity to bring the request within it. At the request the loan would also be a high volatility exposure on the study's value, because its loan to value is above the limit, unless cured. Borrower capital of land and cash is 126.5% of the as-completed value, and the land alone is 41.5%, so the capital test is not the constraint.

A caution on the value basis belongs here. The multiple applies to a going concern, the real estate and the business together. STAX puts a station business sold apart from its real estate at roughly 1.5x to 3.0x EBITDA, with inventory added at closing ^[85], and a conventional lender treats goodwill and equipment as unsecured ^[1]. A bank that credits only the real property would therefore lend less than the limit applied to this going-concern value. The study treats the going-concern value as the upper bound of the bank's collateral value, and the bank's appraisal replaces it.

The equity convention needs one more set of figures, quoted together. At the binding minimum the largest loan the study's cash flow supports is $2,408,923. With construction interest and the origination fee recomputed on that loan at $87,083, the project would cost $3,876,158 in total and the equity would be $1,467,234, which is 37.9% of that total. That supported loan is $848,923 above the request. The value limit, not coverage, keeps the loan small.

Table 12 stresses the base case. Revenue down by a tenth gives coverage of 1.30x; revenue down 20% gives 0.67x, the only column below the binding minimum; a rate up 2 points gives 1.67x; expenses up by a tenth give 1.39x; fuel margin down 5 cents gives 1.61x; and the 2021 OPIS low margin gives 1.39x. At the listed retailer's margins coverage would be 3.57x. A rate up 2 points lifts debt service to $176,210, the exposure when the five-year fixed period ends. The table also prints value and loan to value for each column, and every downside column puts the loan above value or above the supervisory limit: loan to as-completed value is already 86.3% in the base column and reaches 124.5% when revenue falls by a tenth. At the listed retailer's margins, value would be $3,242,577 and loan to value 48.1%, so the value gap is largely a margin gap.

Table 13 shows the margin of safety. Volume can fall to 85.3% of the base case before coverage reaches 1.00x, which is 2,306 gallons a day and $1,914,388 of inside sales, and to 89.2% before it reaches the binding minimum, which is 2,413 gallons a day and $2,003,269 of inside sales. At base volume, the fuel margin at 1.00x coverage is 23.9 cents and at the binding minimum 27.8 cents. Murphy USA's 28.1 cents ^[27] sits just above that line, so a competitor pricing at its margin is the competitive risk to watch.

What Would Change the Answer: The Restructure to the Appraisal

Corridor traffic, the county levy, the land value, the fuel system cost and the spread could each move the base case, and a bank's own numbers would replace the judgements. The appraisal matters most, because the value limit sizes the loan, and it could come in above or below the study's value.

Coverage passes, so nothing needs restructuring to pass that test. What fails is the value test on the study's own value. The restructure the model computes is the bank's resize to that value, and it passes both tests, coverage and value. The study's value of $1,806,609 supports a largest loan of $1,445,287 inside the supervisory limit, and the resized loan, rounded down to $10,000, is $1,440,000 against the sponsor's request of $1,560,000. Table 14 prints the arithmetic.

At the resized loan, interest during construction is $41,256 and the origination fee is $10,800. Total project cost is $3,841,131 and equity is $2,401,131, which is 62.5% of the total. The sponsor adds $115,662 to the equity in the request, and cash beyond the land is $1,651,131. Annual debt service falls to $140,689, so coverage on the study's $294,193 is 2.09x against the binding minimum. The resized loan is 79.7% of the study's as-completed value, inside the supervisory limit, and at that loan both tests for high volatility treatment pass.

The resize is the bank's sizing on the appraisal, not a remedy for failed coverage. For the borrower the lesson is plain: expect the request to come back near $1,440,000 if the appraisal lands near the study's value, and plan for equity near $2,401,131, of which the assumed $750,000 is the land. A borrower who brings the $1,560,000 request and meets an appraisal near the study's value faces a choice between adding equity and cutting the loan.

A real-property-only appraisal would lend less. The value used here is a going-concern value, and STAX says a conventional lender treats goodwill and equipment as unsecured ^[1]. If the bank's appraiser values only the real property, the value falls and the supervisory limit produces a loan below $1,440,000. The study cannot say by how much, because no market rent or real-property-only value for a station is sourced. The borrower should ask the bank which value basis its appraisal order will use, since that difference moves the loan more than any coverage input.

The risks a credit officer would list are specific to this kind of site. Contamination found when the tanks come out is the largest unknown, partly insured through the state fund for participating tanks ^[40] and partly the owner's, since the fund does not pay for lost business ^[42]. Margin swings are a second risk, with the NACS and OPIS annual series running from 29.9 to 42.9 cents ^[16]. Chain competition is a third, with Casey's ^[20] and Murphy USA ^[26] both operating in the state, and the reset of the note rate after five years is a fourth.

A margin or volume above the market average would lift value, but it would need a site-level source such as a corridor count and the old station's gallons. Because the sponsor builds to operate, the return the owner is buying is the cash flow after debt service of $141,779, not a sale at the market multiple.

Decision. The study recommends taking the resized loan of $1,440,000 and equity of $2,401,131 to the bank as the working plan, holding the $1,560,000 request as the case to argue only if the appraisal supports it, and asking the bank for its value basis before the appraisal is ordered.

Questions to Ask a Feasibility Study Company: FAQ

Why does coverage pass while the loan still has to be cut?

The two tests measure different things. Coverage compares cash flow to the annual payment and reaches 1.93x on the study's base case against an assumed binding minimum of 1.25x. Loan to value compares the loan to what the property is worth, and the study's as-completed value of $1,806,609 puts the request at 86.3% against the supervisory limit ^[48]. A store can earn well and still be worth less than the cost of building it, which is the finding here.

What should a feasibility study company or consultant deliver for a conventional gas station loan?

Ask to see the same things this example shows: market figures with named sources, assumptions labelled as assumptions, the sponsor's pro forma beside the study's own, coverage and value tests against the bank's two ceilings, sensitivity and break-even tables, and a plain statement of what could not be sourced. Ask which value basis the study uses and whether a real-property-only appraisal would change the loan. A consultant who hands over only a coverage ratio has answered half of the lender's question.

Does a conventional lender need the same equity as an SBA lender?

Not by rule; by practice. STAX says SBA programs generally require 10 to 20 percent equity and that conventional lenders typically want more ^[56]. On this project the equity share is set by the bank's value limit, 62.5% at the resized loan, and the owner's land counts toward it at its appraised value ^[4].

What happens if the old tanks leak when they are removed?

The fund pays cleanup costs above the claimant's first $10,000, up to $1 million per occurrence, for participating tanks, regardless of when the release occurred ^{[39] [40]}. It does not pay for lost business ^[42], and STAX notes that contamination can exceed the value of a station's collateral ^[45]. The study carries an assumed $40,000 allowance and treats participation in the fund as an assumption to confirm before the loan request.