Gas Station Feasibility Study in California

California fuel retail: large tickets, small losses

California leads every state in SBA gas station and truck stop lending, ranking 1 of 53, with 1,356 loans and $2.75 billion approved from FY2017 to FY2026. Two metrics separate it from the rest of California's SBA lending and from gas station lending nationally. The median loan of $1.7 million is 1.59x the national median; half the deals land between $950,375 and $2.9 million. And the charge-off floor is 0.17% across the 595 loans disbursed in FY2017 through FY2021, the same 0.17% within five years of approval, below both comparators. Among California's own asset classes gas stations rank 6 of 39, and with a location quotient of 1.46x they hold more of the state's SBA book than the class holds nationally.

Franchise brands sit on 61.4% of loans. SBA 7(a) carried 1,112 loans and SBA 504 carried 244. Celtic Bank Corporation holds 153 loans for $407.1 million, Commonwealth Business Bank 123 for $203.8 million, Open Bank 120 for $274.1 million, Bank of Hope 53 for $125.2 million and PCB Bank 51 for $104.9 million. Among certified development companies, The Mortgage Capital Development Corporation holds 54 loans for $108.6 million, and Advantage Certified Development Corporation and Cen Cal Business Finance Group hold 31 each, for $72.1 million and $46.6 million.

The risk that remains is the closing

Cancellation is where California fuel deals stumble: the floor is 15.9% for loans approved in FY2017 through FY2024, rising to 16.6% with undisbursed loans included. A thin loss record does not make approval automatic. The 15.9% cancellation floor shows that a share of approvals never closes. Volume held up across the decade, from 152 loans and $210.0 million in FY2017 to 168 loans and $360.3 million in FY2021 and 150 loans and $385.6 million in FY2026.

What a California station study must carry

By county, Los Angeles leads with 179 loans, then San Bernardino with 128, Kern with 101, Riverside with 74 and Fresno with 71. Demand has to be split into fuel gallons and inside sales, each built from traffic counts, ingress and egress, and the competing stations on the same corridor. Cost needs the tank system's condition and compliance history, canopy and dispenser work, and the store fit-out. Coverage of debt service needs fuel margin and store margin tested separately, with a case for falling gallons over the loan term, since electric charging cannot be seen in this data: it has no entry in the 2022 NAICS index. Value has to be allocated by the appraiser among land and building, equipment and the going business. Bear in mind two limits of the source. SBA records what the borrower does, not what the property is, and one code covers fuel stations without a store together with truck stops and travel centers, so a highway plaza and a corner station are counted alike.