Gas Station Feasibility Study in New Jersey

Smaller and rarer than elsewhere

New Jersey's gas station loans are unlike the national book in size. The cell holds 67 SBA loans from FY2017 to FY2026, worth $41.2 million, and the median loan of $392,000 is just 0.37x the national median for the class. The middle of the distribution runs from $50,000 to $700,000. The state ranks 24 of 53 for the class, gas stations are the 17th of 39 asset classes in New Jersey, and a location quotient of 0.28x shows the sector at barely a quarter of its national weight. The median is where we find this cell distinct from New Jersey lending generally and from the gas station book elsewhere.

A bank-financed cell

The 7(a) program carried 64 loans and 504 only 3, so the record leans on bank credit rather than on the real estate structure. TD Bank, National Association dominates with 19 loans and $3.5 million. Manufacturers and Traders Trust Company holds 7 loans but only $625,000, while Peapack Private Bank and Trust holds 6 and $4.2 million. No development company has 5 or more loans. Franchise loans are 16.4% of the cell. Bergen County leads with 8 loans, with Camden and Morris at 7 each and Middlesex at 5.

Cancellation and timing

The cancellation floor is steep at 23.4% for approvals made between FY2017 and FY2024, and the undisbursed-inclusive ceiling is also 23.4%. Volume peaked in FY2021 at 13 loans and $9.5 million, then dropped to 2 loans and $1.6 million in FY2022. No charge-off rate is printed, as under 30 loans funded in the cohort, and silence is not a clean record.

What a study has to test

A New Jersey gas station study should treat the small median as a clue that most deals are modest conversions or acquisitions of existing stations, and it should say which this project is. Fuel supply terms and margin come first, then the mix of convenience store sales, repair bays or other services, since pump profit alone seldom carries debt. Environmental history is critical for any existing fuel site, so a baseline assessment and the cost of tank replacement belong in the budget. Competition within a few minutes of the site, traffic counts and access should be documented. Coverage must hold at a lower margin and after the cost of compliance. The appraisal will focus on income and on the environmental risk to collateral.

How the code reads in New Jersey

Truck stops and travel centres cannot be pulled out of this cell, the code follows what the borrower does for a living, and a charging business would not appear under it.