Gas Station Feasibility Study in Ohio

Ohio stations: smaller loans, more cancellations

Ohio's station lending differs on cancellation and on size, each clearing our distinctness margin against the state's all-class record and against fuel retail nationally. The first is cancellation: at least 23.3% of Ohio's FY2017 to FY2024 station approvals never funded and were cancelled, and 25.0% if undisbursed loans count as cancelled, a floor above the class nationally. The second is size: the median loan is $528,000, which is 0.50x the national median for stations. Volume is middling. Ohio's 143 approvals in FY2017 to FY2026, worth $120.9 million, rank 12 of 53, the location quotient of 0.38x leaves stations far under their national share of Ohio's book, and inside the state they place 16 of 39.

One bank's book, and very different tickets

The Huntington National Bank holds 47 of the 7(a) loans, worth $18.3 million, so a single lender holds a large part of Ohio station lending. The other leading holders carry very different tickets: KeyBank National Association's 10 loans come to $1.6 million, while Celtic Bank Corporation's 9 total $15.5 million and Readycap Lending, LLC's 8 total $21.5 million. RiverHills Bank holds 6. SBA 7(a) carried 131 loans in all and SBA 504 just 12. The middle half of approvals runs from $87,500 to $1.2 million, which mixes small equipment or working-capital loans with full site purchases. Branded sites account for 43.4% of loans. Cuyahoga County leads with 23 approvals and Franklin follows with 15. FY2021 was the busiest year, with 20 loans worth $22.4 million.

Losses are not the problem

Funded Ohio station loans have performed. Of 54 disbursed over FY2017 to FY2021, a floor of 1.9% has been charged off, and the share failing inside five years is 0.00%. The gap between approval and closing is where Ohio deals have come apart.

That makes closing risk the first thing an Ohio station study should address. Environmental reports, tank condition, title and the brand or supply agreement should be settled before approval, because any of them can sink a deal after it. Demand still has to be measured at the corner: traffic counts, turning movements, visibility, competing stations and travel centers on the same corridor, and what the store can sell beyond fuel. Cost covers land or acquisition price, tanks, dispensers, canopy and store, plus remediation where needed. Debt service coverage should be tested at cautious gallons and inside sales. The appraisal blends real estate and going-concern value, and a study that reconciles its income with that value before the lender orders the appraisal removes a possible cause of cancellation.

The code is the borrower's industry: the same code holds truck stops and travel centers along with stations that sell no groceries, and they cannot be split out; EV charging has no code in the 2022 index, so it is invisible here.