Gas Station Feasibility Study in Illinois

In Illinois, the distinctive fact about SBA gas station lending is how often approved loans never fund. The cancellation floor for FY2017 to FY2024 approvals is 20.9%, with a ceiling of 21.7%, and that floor is higher than the Illinois rate across every class and higher than the class rate nationally, beyond the margin our test uses. Illinois approved 304 loans in the class from FY2017 to FY2026, for $357.7 million, ranking 5 of 53 among states. Stations are 8 of 39 among Illinois classes, and a location quotient of 1.17x shows them with more weight in the state's SBA book than nationally.

What can stop a station loan from closing

A station purchase brings environmental review, fuel supply agreements, brand approval and often tobacco and liquor licensing into the period between approval and closing, and any of them can end the deal. Franchise units account for 56.9% of loans, so a brand's consent is part of most transactions. At $967,500, the median Illinois station loan is 0.92x the class median nationally; the middle half spans $555,775 to $1.6 million. SBA 7(a) carries 281 of the loans and SBA 504 carries 23. Once funded, losses are moderate: the charge-off floor is 6.9% across 131 loans disbursed in FY2017 to FY2021, with 3.1% lost inside five years.

A market led by one bank

Byline Bank holds 99 of the SBA 7(a) loans, worth $138.6 million, far ahead of Millennium Bank with 22, The Huntington National Bank with 20, Enterprise Bank & Trust with 16 and Merchants Bank of Indiana with 12. SomerCor 504, Inc. leads the 504 lenders with 12 loans. Byline's position is what SBA lists it holding today, and a sold loan moves to the buyer's name. Approvals peaked at 54 and $66.2 million in FY2021 and fell to 18 in FY2024. Cook County accounts for 80 approvals, Kane for 38 and Winnebago for 20.

What an Illinois station study has to clear

A study here has to be built to close, not only to win approval. It should confirm the environmental record and tank compliance, the fuel contract terms and the brand's consent before the lender commits. Demand testing covers fuel gallons and inside sales against stations already operating on the same corridor. Cost testing must include any tank, canopy or dispenser work. Debt service coverage should be run on fuel margin and store margin separately, because fuel volume can swing. The appraisal has to allocate value among land and building, fuel equipment and the going business, since lenders size against each. Two coding limits apply. The industry code is assigned to the borrower rather than the property, and it folds truck stops and travel centers into the same bucket as fuel-only stations without a convenience store; electric vehicle charging, meanwhile, is absent from the 2022 index.