Gas Station Feasibility Study in the San Jose-Sunnyvale-Santa Clara, CA Metro Area

San Jose-Sunnyvale-Santa Clara: fuel retail tenth of 39

Gas stations and truck stops rank 10th among the 39 classes in SBA's San Jose-Sunnyvale-Santa Clara, CA file, and the area is 42nd of 600 for the class. Between FY2017 and FY2026 the record holds 30 loans and $58.2 million of approvals for San Jose. San Jose shows a location quotient of 0.85x and a median loan of $1.6 million, which is 1.55x the national median for the class. These are big loans for a class that is not unusually frequent here.

Of the 30 loans, 23 are 7(a) and 7 are 504. Franchise units are 66.7%, so two of every three loans sit under a brand, and signage, layout and supply requirements are likely to be a large part of the budget. No holder reaches 5 loans in San Jose, so no lender is named.

Years and limits

FY2019 shows 6 loans worth $11.3 million and FY2020 shows 5 worth $10.2 million. FY2023 shows 0 loans and $0. Years not shown for San Jose sit beneath the display floor. In the code, truck stops and travel centers cannot be told from other fuel retailers, and electric charging has no line of its own. No cancellation or charge-off rate for San Jose: its cohort has fewer than 30 loans.

Read together, the figures say that fuel retail in this area is smaller in number than the national pattern would predict but larger in size, and that two years, FY2019 and FY2020, carry most of the dollars that can be printed, at $11.3 million and $10.2 million. Those two years should not be taken as a trend, but they show the pull that a few large loans exert on a small cell, which is a reason for a lender to focus on the median and the middle half.

Pricing a San Jose-area fuel corner

Pump volume and inside sales need separate estimates, each with its own margin, set against tanks, canopy, building and land, with the parcel's environmental history reviewed early. Debt service must be covered with fuel margin squeezed. A lender looking at $1.6 million as the local median will compare the request to the cost of the site and ask how the specific corner differs from the others in the record, and the appraiser may value the property as a going concern or as real estate, so the study shows both.