Gas Station Feasibility Study in Texas

A large ticket in a heavily weighted class

Texas leans hard into gas station lending. The location quotient is 2.42x, the state ranks 2 of 53 for the class, and gas stations and truck stops are 4 of 39 asset classes within Texas, on 1,300 loans worth $2.12 billion across FY2017 to FY2026. The Texas station median is what divides this cell from Texas lending overall and from the class nationally: $1.3 million, or 1.27x the national median. The middle half of Texas station loans ran from $775,000 to $2.3 million.

At these sizes the loan likely covers real estate along with the business: land, tanks, canopy and store. SBA 7(a) carried 1,239 of them and SBA 504 just 61, so 7(a) is the program doing the work here, real estate included. Franchise operations make up 50.8% of loans. Approvals peaked at 229 in FY2021, worth $393.3 million, and stood at 118 in FY2026, worth $227.2 million.

Concentrated lenders, low losses

The Texas lender list is concentrated. Wallis Bank is the current holder of 198 loans worth $397.0 million and Metro City Bank 159 worth $238.4 million; behind them come Celtic Bank Corporation with 55, Commonwealth Business Bank with 51 and Southwestern National Bank with 45, the last worth $95.8 million. On the 504 side, North Texas Certified Development Corporation holds 20 and Capital Certified Development Corporation 18.

Once funded, Texas station loans have rarely failed. In the cohort of 622 Texas station loans disbursed during FY2017 through FY2021, charge-offs total 0.64% so far, and 0.00% inside five years. The friction comes before funding: no fewer than 14.7% of Texas station approvals from FY2017 to FY2024 were cancelled, with a ceiling of 15.5%. For a borrower, that cancellation floor is the more relevant risk; for a lender, it is underwriting work spent on deals that looked sound at approval.

What a Texas station study must test

Demand means fuel gallons and store sales at the specific corner, against the stations already on the corridor, in counties led by Harris, Dallas and Tarrant at 189, 139 and 125 approvals. Cost includes tank, dispenser and environmental work, not only the store. Coverage at a $1.3 million median has to hold on fuel margin as well as inside sales. The appraisal must value the real estate and the going concern separately. The class carries limits: the code tracks the Texas borrower's industry rather than the property, and truck stops and travel centers share a code with gas stations that have no store, so a Texas travel center cannot be isolated. EV charging is invisible in this Texas file, since the 2022 NAICS index gives it no entry of its own.