How Profitable Is a Gas Station? What a Feasibility Study Consultant Tests, Line by Line

Summary

A gas station is profitable when its gross profit dollars outrun three costs that are rising faster than its sales: labor, card fees and the return its capital has to earn. The median gas station cashier wage rose about 31 percent between 2021 and 2025. U.S. card swipe fees reached a record $198.25 billion in 2025. And public operators now size a new fuel-and-convenience store at $10 million to $12 million and expect it to return about 15 percent in its first year. Since October 1, 2026, SBA has added a fourth test for anyone buying an existing station: debt capped at an independent business valuation, and 1.25x coverage on historical cash flow, with projections no longer counting. This article walks through each line of a gas station’s profit and loss the way a feasibility study consultant tests it, names the figures that should not be cited, and shows how an acquisition that looks financeable on the seller’s numbers can fall a third of a million dollars short under the new rules.

Ask how profitable a gas station is and you will get two answers, both wrong. The first is a revenue percentage: a few percent of sales, usually quoted without a year or a country. The second is a gallon count: a busy station sells so many gallons a day and therefore makes money. Neither tells a lender whether a specific site will service a specific loan. Revenue swings with the price of crude oil. Gallons are only a volume, and the cents earned on each one move more than the gallons do.

What a feasibility study consultant tests is narrower and more useful. It is whether the gross profit the site can earn, in dollars, covers the operating costs it will actually incur, the debt it will actually carry and the return its owner could earn elsewhere, under conditions worse than today’s. That test is line by line. It uses the site’s own wage market, its own state’s tank fees and markup laws, its own card mix and its own lender’s rules. A study that applies a national margin to projected revenue has skipped every step that matters.

The sections below take the lines in the order a consultant builds them: gross profit, labor, card fees, environmental and other fixed costs, and the state rules that move the margin. They then turn to the capital side, what a new station costs and what an existing one sells for, before working through the financing tests, an acquisition example under the October 2026 SBA rules, the break-even and stress cases, and what it takes to make a projection checkable after the station opens. Every figure is dated and sourced, and where the public record has a gap, we say so rather than fill it.

Why revenue percentages mislead

The first thing a consultant does with a gas station pro forma is strip out the percentages, because at a fuel retailer revenue is mostly a pass-through of the wholesale price.

Sales move with crude oil, not with the business. Census Bureau retail data put U.S. gasoline station sales at $513.5 billion in 2019 and $428.1 billion in 2020, a 17 percent drop, and then at $572.7 billion in 2021 and $736.1 billion in 2022, a 29 percent rise in a single year (2). Neither swing says much about whether stations became more or less profitable. A pro forma that projects revenue and applies a margin percentage to it inherits the volatility of the oil market and calls it a forecast.

The part that pays the bills has been shrinking in real terms. The Bureau of Labor Statistics measures retail output two ways: by sales activity and by gross margin, the dollars retailers keep after the cost of goods. For gasoline stations from 2004 to 2022, real sectoral output rose 0.3 percent a year while real gross margin output fell 2.3 percent a year (1). On the same BLS output measure, stations with convenience stores produced about $508 billion in 2024, down from about $522 billion in 2023 (3). The stations kept selling; what they earned on each unit of selling, adjusted for inflation, fell. That is the fact a feasibility study has to start from, and a revenue line hides it.

Fuel dominates sales and not profit. In NACS’s 2025 data, fuel was 65 percent of the average convenience store’s sales and 38.8 percent of its gross profit (6). Any ratio expressed as a percentage of total revenue is weighted toward the line that contributes the minority of the profit. A station that sells more fuel at the same cents per gallon looks less profitable as a percentage and is more profitable in dollars.

Two margin figures circulate that should not be cited. The first is a pair often quoted in U.S. articles and pro formas: a 16.2 percent gross margin and a 6.4 percent net margin for gas stations. Those are Statistics Canada figures for Canadian stations in 2023 (4). The second is an 18 percent gross and roughly 1 percent net margin attributed to IRS sole-proprietor returns, quoted without a tax year, alongside a 9.94 percent gross margin for S-corporation stations from 2014 data (5). Neither is a current U.S. benchmark. The right primary sources exist: RMA’s Annual Statement Studies cover NAICS 447110 and 447190 behind a paywall, and the Census Bureau released its 2022 benchmarked retail trade tables, including gasoline station gross margins and operating expenses, on August 31, 2026, as downloadable spreadsheets (2). A lender-grade study buys the first or pulls the second. It does not repeat a figure from a blog that cannot name its year or its country.

The practical rule is simple. Gross profit is projected in dollars, line by line: fuel gallons times cents per gallon, and inside sales by category times each category’s margin. Operating costs are projected from their own drivers, not as percentages of a revenue figure that moves with the price of crude. The rest of this article follows that rule.

Line 1: gross profit, in cents and in categories

Gross profit at a gas station comes from three sources, and a consultant tests each one on its own terms.

Fuel gross profit is gallons times cents, and the cents need a definition. The industry benchmark is the OPIS rack-to-retail margin, which averaged 39.7 cents a gallon for U.S. gasoline in both 2024 and 2025, against roughly 22 to 24 cents a gallon from 2014 through 2019 (7). That is a street-level gross figure: retail price minus the posted rack price, before card fees and before anything the station pays its supplier above rack. Operators report different measures. Casey’s earned 42.6 cents a gallon excluding card fees in fiscal 2026 (8). Murphy USA’s total fuel contribution, which includes its supply and wholesale activities, was 30.7 cents in 2025 (9). A branded dealer buying at a dealer tank wagon price, or an independent paying a jobber margin above rack, realizes less than the OPIS figure. The first question a consultant asks of a pro forma margin is therefore which margin it is: OPIS rack-to-retail, net of card fees, or the station’s own realized margin from its supply invoices. The three can differ by 10 cents a gallon or more, and on a station selling a million gallons a year, every cent is $10,000 of profit.

The margin needs a base case and a floor. A 40-cent margin has held for four years. It has not held for longer than that, and nothing in the supply chain guarantees it. A defensible study sets its base case below the 2024 to 2025 level, runs a downside at the 2014 to 2019 range, and shows debt service coverage at both. The volume input should be built from transactions times gallons per transaction, using NACS’s 8.4 gallons per fueling transaction rather than the 10 or 11 gallons that sponsor pro formas often assume (33).

Inside gross profit is a mix, not a margin. Merchandise and foodservice carry very different margins, and their mix decides the store’s contribution. Casey’s reported a 58.6 percent margin on prepared food and dispensed beverage in fiscal 2026 against 35.8 percent on grocery and general merchandise (8). Across NACS’s 2025 data, foodservice was 28.5 percent of in-store sales and 38.9 percent of in-store gross profit (6). Tobacco, still a large share of sales at many independents, is shrinking and carries thin margins. A consultant forecasts each category separately, applies the operator’s actual category margins from its point-of-sale data where they exist, and treats a new food program as a separate business with its own capacity, labor and ramp.

Format decides the result. Yesway’s 2026 registration statement compares its new self-funded stores, about 5,800 square feet with 27 fuel dispensers, against its legacy stores, about 3,400 square feet with 10 dispensers: average annual store contribution of $1.4 million against $0.4 million (10). Most of that gap comes from fuel volume and food, not from floor area. A small legacy-format station is a different business from a new large-format store, and a study that borrows the larger format’s inside-sales ratios for the smaller one overstates its profit.

Other income is real but small. Lottery and money-order commissions, ATM fees, car wash revenue and rent from a quick-service tenant belong in the model as their own lines, supported by contracts or history. They rarely carry a loan, and a study that leans on them to reach coverage should say so.

Line 2: labor, the largest controllable cost

Labor is where most single-site pro formas are weakest, because they express it as a percentage of sales. A consultant builds it from hours and local wages instead.

The workforce is mostly cashiers, and their pay has risen fast. In BLS’s May 2023 occupational survey, gasoline stations employed 967,290 people at a median wage of $14.36 an hour; cashiers were 610,070 of them, 63 percent of the industry, at a median of $13.87 (11). General and operations managers numbered 33,940 at a median of $26.81 (11). By the 2025 survey the median gas station cashier earned $14.68 an hour, against $11.24 in May 2021, an increase of about 31 percent in four years (11). The federal minimum wage has not moved from $7.25 since 2009, so almost all of that increase comes from local labor markets and state and municipal minimums (11).

Public operators confirm the direction. Casey’s reported in its fiscal second quarter of 2026 that operating expenses rose 16.7 percent; about 10.5 points of that came from operating 236 more stores, and about 2 points from same-store employee expense, driven by higher labor rates with same-store labor hours flat (8). At its June 2026 investor day, Casey’s said average hourly earnings in the convenience channel have been growing twice as fast as in the past (8). Murphy USA, with a lean small-box format, held its store operating expense per store per month, excluding payment fees and rent, to a 3.1 percent increase in 2025 (9). The difference between those two figures is largely a difference in format and staffing, which is exactly why a pro forma cannot borrow one operator’s labor ratio for another’s store.

The model a consultant builds. Staffing is set by operating hours, the number of positions on each shift, the food program’s prep and service hours, and the manager structure. Each position is priced at the current local wage for the occupation, plus payroll taxes, workers’ compensation and benefits. As an illustration, a 24-hour station with two people on every shift needs about 17,500 cashier hours a year. At the 2025 national median cashier wage and a 20 percent burden assumption, that is about $309,000, before a manager; at the 2021 median wage it would have been about $236,000. The same staffing plan costs about $72,000 a year more than it did four years ago, with no change in hours. A station whose cash flow cushion is smaller than that has already absorbed its margin for error.

Two data gaps matter here. BLS does not publish gasoline station wages by state, only cross-industry occupational wages by state and metro area, so a study should use the metro cashier and food-preparation wages for the site’s labor market. And there is no single primary-source table of the state and local minimum wage steps scheduled for 2026 and 2027; the consultant has to check the jurisdiction directly and carry any scheduled increase into the projection years. A labor line that holds today’s wage flat for five years, in a market with a scheduled minimum wage step, is an error rather than an assumption.

Line 3: card fees, the cost that scales with the price of fuel

NACS calls card acceptance fees the convenience industry’s second-highest operating expense after labor (13). They are also the one cost line whose size depends on the price of a commodity the station does not control.

The totals are at records. U.S. merchants paid $198.25 billion in credit and debit swipe fees in 2025, up 5.9 percent from $187.2 billion in 2024, according to Nilson Report data published by the Merchants Payments Coalition; credit cards accounted for $157.8 billion and debit for $40.5 billion (12). The average Visa and Mastercard credit swipe rate was 2.36 percent, against 2.35 percent in 2024 and 2.02 percent in 2010 (12). Convenience retailers paid a record $21.3 billion in 2025 by NACS’s count, $4.6 billion of it in fees charged on the taxes the stores collect for federal and state governments (6). At the operator level, Casey’s reported credit card fees of $71.5 million for its fiscal second quarter of 2026, up from $62.3 million a year earlier (8).

Why fees behave differently from every other cost. A percentage fee on a fuel sale rises with the pump price, while the station’s cents-per-gallon margin often does not. At 2.36 percent, a credit sale costs about 7.1 cents a gallon at a $3.00 pump price and about 10.3 cents at $4.35, the national average retail price in September 2026 (12, 34). That is 3 cents a gallon of extra cost from a price spike alone, on a margin that may be compressing at the same moment. The fee is also charged on the fuel taxes embedded in the price, which is why the industry counts billions in fees on money it never keeps.

The legal status is unsettled in both directions. Federal Reserve Regulation II caps debit interchange for issuers with more than $10 billion in assets at 21 cents plus 0.05 percent of the transaction plus a 1-cent fraud adjustment. On October 26, 2026, the Eighth Circuit in Corner Post v. Board of Governors affirmed a 2025 district court ruling vacating the cap and sent it back to the Fed to rebuild using only the costs the statute allows; the ruling does not take effect until the court’s mandate issues, a Sixth Circuit case on the same rule was argued four days earlier, and the Fed’s own proposal to lower the cap is still pending (14). On credit, a federal judge in the Eastern District of New York granted preliminary approval on June 9, 2026 to a Visa and Mastercard settlement that would cut the average effective U.S. credit interchange rate by 10 basis points for five years, cap posted standard consumer credit rates at 1.25 percent and widen merchants’ surcharging and acceptance choices; 978 merchants and trade groups filed objections in September, and nothing takes effect before final judgment (15). NACS opposed an earlier version of the settlement as “smoke and mirrors” (13). The Credit Card Competition Act, which would require large issuers to enable a second, unaffiliated network, remains under consideration in Congress (12).

How a consultant models it. Card fees are built from projected fuel price times the share of sales paid by card, split by tender type, times each type’s effective rate from the operator’s processing statements, with fleet cards and inside sales modeled separately. The study runs the fee at today’s price and at a stressed price, and it does not credit any savings from the pending settlement or the debit litigation until they are final. A pro forma that carries card fees as a fixed number of cents per gallon, or as a fixed share of gross profit, has assumed away the line most likely to move against it in a price shock.

Line 4: tanks, environmental compliance, fixed costs and the supply agreement

The remaining operating lines are smaller individually and decisive together, and two of them, tank fees and the fuel supply agreement, are specific to fuel retail in ways a generic retail model misses.

State tank fees are a per-gallon cost with no national benchmark. Most states fund leak cleanup through a per-gallon fee on petroleum, and the rates differ by a factor of four. California’s petroleum storage fee was 2 cents a gallon for fiscal 2024 to 2025 (16). Illinois collects 0.3 cents through its motor fuel tax plus a 0.8-cent environmental impact fee, both scheduled to expire in 2030 (17). Massachusetts charges an underground storage tank delivery fee of 2.686 cents a gallon (18). Virginia’s fee is 0.6 cents (19). Minnesota imposes a 2-cent fee for four months whenever its cleanup fund falls below $4 million, and it was in effect from September to December 2025 (20). On a station selling 1.2 million gallons a year, those rates range from about $7,200 in Virginia to about $32,000 in Massachusetts. Whether the fee is collected at the terminal or billed to the owner, it comes out of the station’s margin unless the street price absorbs it.

The state fund decides how much a leak costs the owner. State cleanup funds reimburse remediation above a deductible, and the terms vary. Illinois applies a $5,000 deductible to releases reported since June 8, 2010 (17). One summary of North Carolina’s commercial fund describes no cleanup deductible, a $100,000 third-party deductible, a $1.5 million maximum and a 20 percent co-pay above $1 million (21). California’s fund was extended in 2014 to a January 1, 2026 sunset, and its current status and claim deadlines should be confirmed with the State Water Resources Control Board before a study relies on fund coverage (16). Federal rules require every tank owner to demonstrate financial responsibility for releases, through a state fund, insurance or another approved mechanism (22). The consultant’s job is to identify which one the subject relies on, what it costs and what it leaves uncovered.

Compliance has a schedule. EPA guidance requires tank tightness testing at least every five years where inventory control is the leak-detection method, with line tightness testing annually or every three years depending on the method used (22). One lender marketplace puts typical costs at $2,000 to $4,000 for a Phase I environmental site assessment, $5,000 to $15,000 for a Phase II and $500 to $2,000 for a tank tightness test (23). These are indicative secondary figures; the study should price the subject’s own testing contract and note the age, wall construction and release history of every tank.

Insurance, property tax, utilities and repairs have no reliable public benchmark. No primary or neutral source publishes per-site figures for single gas stations. Murphy USA attributes part of its 2025 store expense growth to higher maintenance costs at existing stores, without per-store amounts (9). A consultant uses the subject’s actual tax bill, current insurance quotes including pollution legal liability, and twelve to twenty-four months of utility history, and prices major repairs, dispensers, canopy, tanks and point-of-sale systems, as a reserve rather than an afterthought.

The supply agreement is a cost line and a contingent liability. A branded station buys fuel under a supply contract that sets the price basis, often a dealer tank wagon price or a markup over rack, along with minimum volumes, image standards and term. Many agreements carry image or incentive funding that the dealer must repay on a declining schedule if the contract ends early. No public dataset quantifies dealer tank wagon premiums, branded versus unbranded rack spreads or typical clawback schedules, so the study reads the actual contract. SBA reviews fuel supply and distributor agreements much as it reviews franchise agreements, looking at assignment, minimum-volume and termination terms (30). The unamortized balance of any incentive funding belongs in the study as a contingent liability, because it is due at exactly the moment a struggling station tries to change suppliers.

State rules that move the margin

Two stations with identical traffic and identical stores can have materially different profit because of the state they sit in. A consultant checks four state-level rules before setting a margin assumption.

Minimum markup laws set a floor under the fuel margin. According to the Badger Institute, 25 states still had some form of minimum markup or unfair sales law on their books in 2026 (24). Wisconsin’s is among the steepest; its Unfair Sales Act guidance defines the cost of retail motor fuel as the greater of invoice or replacement cost plus a 6 percent cost-of-doing-business markup, or the average posted terminal price plus a 9.18 percent markup, and a 2023 Legislative Reference Bureau analysis describes required markups of 3, 6 or 9.18 percent depending on the seller and station type (24). Wisconsin’s administrative rules also provide that payment-method discounts do not reduce the selling price for below-cost purposes, which matters for any cash-discount pricing plan (24). New Jersey prohibits below-cost gasoline sales (24). The map is shifting: Minnesota repealed its gasoline and dairy markups in 2023, Utah repealed its Unfair Practices Act the same year, Oklahoma repealed its 6 percent fuel markup in 2025 while keeping its Unfair Sales Act, and a 2024 repeal attempt in Wisconsin failed (24).

What that means for a feasibility model. In a minimum markup state, the statute limits how far a competitor can cut price, which narrows the downside of a local price war and makes a margin floor partly a legal question rather than only a market one. It also limits the subject’s own ability to undercut a competitor to win volume, which matters for any pro forma built on a price-leader strategy. The floor moves with the wholesale price, so a study should compute it from current terminal prices and the statute’s formula, and set its downside margin case no lower than the law allows. In a state without such a law, the downside case has no legal floor at all.

Tank fees vary by a factor of four. As the previous section showed, per-gallon cleanup fees run from 0.6 cents in Virginia to 2.686 cents in Massachusetts, and some, like Minnesota’s, switch on and off with the fund balance (16–20). A study applies the subject state’s current rate and notes any scheduled change.

Fuel taxes change the card fee and the price perception. State motor fuel taxes are embedded in the pump price, so a high-tax state raises both the percentage card fee per gallon and the price gap with lower-tax neighbors near state lines. The most recent comprehensive compilation of state fuel tax rates and collection points, the Federation of Tax Administrators’ book, dates from September 2023 (25). Because many states index their rates annually, a study should take the current rate from the state revenue department rather than from a compilation.

Two gaps remain. No primary source compiles property tax treatment of gas station real estate and equipment across states, and no current table compares station counts per capita by state from a primary source. Both are local questions that the consultant answers from the county assessor and the competitive census of the trade area, not from a national average.

What a new station costs, and what it has to earn

Positive cash flow is not the same as a profitable investment. A consultant tests a proposed station against the return its capital could earn elsewhere, and the public operators have now published what that return looks like.

New large-format stores cost eight figures. Yesway’s 2026 registration statement sizes a self-funded new store at $10.0 million to $12.0 million per project, with a target one-year return of about 15 percent (10). Where a developer builds the store and leases it to Yesway, Yesway’s own capital is $2.5 million to $3.0 million and its target one-year return about 30 percent; developers on those build-to-suit deals priced at an average capitalization rate of 7.86 percent between December 2023 and December 2025 (10). Murphy USA guided to “over $300 million” for 30 to 35 new stores in 2024, roughly $8.6 million to $10 million per store by simple division, though the figure may include pipeline costs beyond the stores themselves (9). Murphy built 50 new stores and 23 raze-and-rebuilds in 2025 and plans about 50 and 30 a year through 2030 (9).

The hurdle is explicit. Casey’s told investors in June 2026 that its cost of capital is a touch above 7.25 percent and that its return on invested capital was 12.7 percent in fiscal 2026 (8). It also said an acquired store typically costs about $1 million less than a new build while meeting the same return requirement (8). Yesway’s new stores averaged $1.4 million of annual store contribution in 2025; on a $10 million to $12 million project that is roughly 11.7 to 14.0 percent before rent, overhead and taxes, by our arithmetic (10). Those are the yardsticks a single-site study faces.

The test a consultant applies. Divide stabilized site EBITDA, after a market rate for management, by total project cost, including land, site work, building, canopy, tanks and piping, dispensers, equipment, soft costs, financing costs during construction and working capital. Compare the result with the operator’s cost of capital and with the public-operator range. As an illustration, a $6 million independent station needs about $435,000 of stabilized EBITDA just to match a 7.25 percent cost of capital and $700,000 to $840,000 to match Yesway’s implied range. A study that shows a project clearing its debt service but earning less than its cost of capital has shown a loan that may be repaid on an investment that should not be made. Lenders read that difference as risk, because owners of underperforming investments sell, defer maintenance or walk away.

Buy or build is a feasibility question too. Casey’s $1 million figure is a reminder that existing stations are often cheaper per dollar of cash flow than new ones. They also come with tank age, environmental history, deferred maintenance and a supply agreement that may not be assignable. A study for an acquisition prices those items explicitly; a study for a new build compares its cost per dollar of stabilized EBITDA with the acquisition alternatives in the same market.

The cost side has a data gap. No primary or neutral public source in our research publishes current construction cost per square foot for a 3,000 to 6,000 square-foot convenience store, or itemized costs for canopies, tanks and dispensers, and land prices for signalized corner parcels are local by nature. A study builds the budget from contractor bids, equipment quotes and the actual land contract, and reports a contingency rather than borrowing a cost-per-square-foot rule of thumb.

What existing stations sell for, and what a cap rate does not tell you

Many SBA gas station loans finance an existing business rather than a new build, and the price of that business is where the October 2026 rules now bite. A consultant needs two kinds of market evidence: what small stations actually sell for, and what investors pay for station real estate under a lease. They measure different things.

Small-station sale prices have roughly doubled since 2021. BizBuySell’s benchmark of 796 gas station businesses sold from 2021 through 2025 shows a median sale price of $615,000, a median revenue of about $2.0 million and median owner earnings of $185,632, with a median of 128 days on the market (26). The average earnings multiple was 3.76 times and the median 3.00, with the bottom quarter at 1.74 and the top quarter at 5.60; the average revenue multiple was 0.50 (26). Year by year, the market moved as follows.

The average earnings multiple rose from 3.19 times in 2021 to 3.70 times in 2025, well above the 2.61 times average cash-flow multiple BizBuySell reported across all industries for 2025 (26). Three cautions apply. The data are self-reported by brokers and sellers. Sales that include real estate are not separated from business-only sales. And BizBuySell’s earnings are seller’s discretionary earnings, cash flow before the owner’s own pay, so a 3.76 multiple of discretionary earnings is a materially higher multiple of EBITDA after a market-rate manager.

Station real estate trades at net-lease prices that do not apply to an owner-operator. Convenience stores were the tightest-priced of 17 net-lease sectors in the second quarter of 2026, at an average cap rate of 5.63 percent; at year-end 2025 stores with fuel averaged 5.58 percent and stores without fuel 6.87 percent (27). Northmarq reports an average closed gas station and convenience store sale of about $4.6 million, near $1,400 per square foot, and Getty Realty paid $260.9 million for 41 Refuel stores in a 2026 sale-leaseback, about $6.4 million per store (27). For context, single-tenant retail overall averaged 6.84 percent in the first quarter of 2026 on Northmarq and Real Capital Analytics data, from 5.98 percent in the Northeast to 7.69 percent in the Midwest, and convenience store vacancy was the lowest of any single-tenant retail segment at 1.0 percent (28).

The spread between those numbers is the operator’s risk. A 5.6 percent cap rate prices the rent paid by a creditworthy tenant on a long lease. Yesway’s build-to-suit developers accepted 7.86 percent (10). A small business selling at 3.0 to 3.76 times discretionary earnings is priced at an earnings yield of roughly 27 to 33 percent, by simple inversion. Each step down that ladder adds operator, location and liquidity risk. An appraisal or feasibility study that capitalizes an owner-operator’s net operating income at a net-lease cap rate values a small business as if it were a credit-tenant lease and overstates it, sometimes by a factor of two.

Two separate values, one reconciliation. A going-concern gas station has a real estate value and a business value. Under SBA’s current rules they come from different professionals: the real estate from a state-certified general appraiser, and the business from a valuation analyst holding one of the credentials SBA now names, ASA, CBA, ABV, CVA or BCA (29). The allocation among land, improvements, equipment and intangibles has to reconcile across both reports, and the purchase price has to reconcile with their sum. Where it does not, the difference is goodwill that the debt cap described in the next section will not finance. No published Appraisal Institute guidance in our research sets gross profit multipliers or owner-operator capitalization rates for convenience stores, so the business valuation should show its comparable transactions rather than cite a rule.

The financing tests

A feasibility study is read against the lender’s program rules, and for gas stations those rules changed on October 1, 2026. A consultant has to know which version applies to the file in front of them.

SBA coverage floors. A standard 7(a) loan must show debt service coverage of at least 1.15 to 1 on a historical or projected basis, with operating cash flow defined as EBITDA; since March 1, 2026, 7(a) Small loans of $350,000 or less must show at least 1.10 to 1 (31). Lenders commonly set their own targets higher for special-purpose collateral such as a gas station.

SOP 50 10 8.1 rewrote the acquisition rules. SBA issued SOP 50 10 8.1 on August 14, 2026 under Information Notice 5000-880695, with technical updates on September 25, 2026, and it governs loans receiving an SBA loan number on or after October 1, 2026 (29). As summarized by lender counsel, valuation firms and consultants, the changes that matter most for buying a station are these (29):

• Initial acquisitions and owner buyouts must show 1.25x debt service coverage on historical cash flow, and projections no longer count toward the acquisition coverage test; at least one commentator reads narrow exceptions into the text, which should be checked against the SOP itself.
• Total transaction debt, including seller financing that is not on full standby, is capped at the independent business valuation.
• The business valuation must come from a qualified source holding an ASA, CBA, ABV, CVA or BCA credential, and the lender must verify the financial statements behind it against the seller’s IRS transcripts. Summaries disagree on whether the independent valuation is required for every change of ownership or only above a $350,000 business purchase price or between related parties.
• A quality of earnings report is required for initial acquisitions and business expansions with a business purchase price of $3 million or more, excluding real estate.
• The 10 percent equity injection on a first-time acquisition cannot be reduced, and the business portion of the loan is limited to a 10-year term, blended with any real estate portion.

Every item above comes from secondary summaries of a two-month-old procedure, and they do not all agree; a study for an SBA acquisition should cite the SOP text, including its valuation appendix, rather than a summary. The direction is not in doubt. A seller’s pro forma no longer finances its own price. Historical cash flow, verified against tax returns, now has to carry the deal.

Environmental requirements carry forward. A gas station loan requires a Phase I environmental site assessment regardless of loan size, with SBA’s reliance letter, and environmental reports must be dated within one year of the SBA loan number (30). Under the gas station appendix of the prior SOP, any Phase II had to be performed by a licensed professional engineer or geologist with three years of relevant experience, and any party holding environmental indemnification rights had to waive them using SBA’s indemnification agreement; one environmental firm reads SOP 50 10 8.1 as leaving the environmental chapter substantively unchanged (30). Gas stations are also special-purpose property, which raises the borrower contribution on an SBA 504 loan to 15 percent, or 20 percent for a new business (31).

USDA makes the study itself a requirement more often. Under 7 CFR Part 5001, a feasibility study is a report by an independent qualified consultant evaluating the economic, market, technical, financial and management feasibility of the project, organized as Appendix A to Subpart D sets out: executive summary, economic, market, technical, financial, management, recommendation and qualifications (32). A Business and Industry guaranteed loan above $1 million to a new business requires one, and the agency may require one in other cases when it cannot otherwise find a basis for repayment (32). The rule does not set a blanket coverage minimum for new projects; the lender writes one into the loan agreement, and where refinancing is the majority purpose for an existing business, historical coverage must be at least 1.1 times on the proposed debt service (32). Appendix A lists sensitivity analysis as an element of the financial section without defining its method, variables or thresholds, which leaves the stress design to the consultant and makes it the part of the study most worth reading closely (32).

Conventional and securitized lenders publish less. Our research found no public rating-agency, bank-examiner or lender guidance setting loan-to-value, coverage or amortization standards specific to gas station collateral. Conventional terms are set by each bank’s credit policy, and a study for a conventional lender should ask for the policy’s coverage and stress requirements before it is written, not after.

Worked example: buying an existing station under the October 2026 rules

The new acquisition rules are easiest to understand on a specific deal. The figures below are illustrative, built from the cost lines above, and the rate is an assumption; the structure is what matters.

A buyer agrees to pay $3.0 million for an operating station with a convenience store. The real estate appraises at $2.1 million, leaving $900,000 for equipment and business intangibles. The seller’s tax returns, verified against IRS transcripts, support three-year average EBITDA of $340,000 after a market-rate manager’s salary. The seller’s pro forma shows $420,000 next year from a planned food program. The buyer proposes an SBA 7(a) loan of $2.7 million with a 10 percent equity injection of $300,000, split in proportion to the purchase price, and an illustrative 9.5 percent rate.

On historical cash flow, coverage is 1.05x. That fails the 1.25x acquisition test, and it would fail the standard 1.15x floor as well. The seller’s $420,000 projection would show 1.30x, but under the new rules projections no longer count toward the acquisition coverage test, so the food program’s promise does not finance the price.

The term rule matters as much as the coverage rule. Under the prior procedure, a loan in which real estate made up the majority of proceeds could typically be amortized over 25 years in full. On those terms the same $2.7 million would carry about $283,000 of annual debt service and 1.20x coverage, enough to clear the old 1.15x standard. Holding the business portion to ten years adds about $41,000 a year of debt service on the same deal, by our arithmetic.

Solving for what the cash flow supports. At 1.25x, $340,000 of EBITDA supports $272,000 of annual debt service. The real estate portion takes $198,154 of that, leaving about $73,800 for the business portion, enough to amortize roughly $476,000 over ten years at the assumed rate. The proposed business financing is $810,000, so the gap is about $334,000. It can be closed with about $334,000 of additional equity, bringing the buyer’s cash to roughly 21 percent of the price; with seller financing on full standby, which does not count against the valuation cap; with a lower price; or with EBITDA of about $405,000, 19 percent above what the tax returns show. If the independent business valuation comes in below $900,000, the debt cap tightens further, because total transaction debt on the business cannot exceed the valuation.

What the feasibility study contributes. It does not argue the seller’s projection back into the coverage test. It documents the historical cash flow line by line, reconciles it to tax returns and point-of-sale data, separates owner perquisites from operating costs, and identifies which costs will change under new ownership: labor at current local wages, card fees at the current price and tender mix, tank fees, insurance at a new owner’s quotes and any supply-agreement change. It then shows the coverage the deal supports on that verified base and the equity, standby seller note or price adjustment needed to reach 1.25x. The projection still belongs in the study, as evidence of what the buyer can build after closing, but it now supports the business plan rather than the loan size.

Break-even and stress testing

A projection says what should happen. A break-even says how much can go wrong before the loan stops covering itself, and it is the single number most worth putting on the first page of a gas station study. Two versions are useful, because a station can fail on volume or on margin.

Break-even gallons answers how far fuel volume can fall:

Break-even gallons = (Fixed operating costs + Debt service − Inside gross profit − Other income) ÷ (Fuel margin per gallon − Card fees per gallon − Tank fees per gallon)

Break-even fuel margin answers how far the cents per gallon can fall at the projected volume:

Break-even margin per gallon = (Fixed operating costs + Debt service − Inside gross profit − Other income) ÷ Projected gallons + Card fees per gallon + Tank fees per gallon

Two details separate a careful version from a careless one. Card and tank fees belong in the denominator of the first formula and as additions in the second, because they scale with gallons and price rather than sitting in fixed costs. And debt service should be multiplied by the coverage the lender requires, 1.15, 1.25 or the bank’s own covenant, to give break-even at the required coverage as well as at 1.0. The distance between projected gallons or margin and those break-evens, stated as a percentage, is the cushion a credit officer actually needs.

The stress cases a lender should see. Appendix A to the USDA rule requires sensitivity analysis without saying what it should test, and SBA requires none by name, so the design falls to the consultant (32). For a gas station, the cases below cover the risks the cost lines in this article identify.

Each case should be run one at a time and then in a combined moderate downside, and each should report coverage and the gallon or margin cushion. A study that shows only its base case has not tested the projection; it has restated it.

Forecast accountability: making a projection checkable

Every feasibility study is a forecast, and most are never compared with what happened. For gas stations the public record of that comparison is thin enough to be its own finding.

What failure looks like in the record that exists. We found no SBA Inspector General report, court decision or regulator finding that compares gas station feasibility projections with actual results, and no public post-mortem of the small fuel chains that failed between 2023 and 2026. The clearest signals come from the public operators. Murphy USA recorded $5.3 million of property impairments in 2025, after $8.2 million in 2024, citing competitive pressures in certain Northeast markets (9). Casey’s told investors in June 2026 that traditional convenience operators are increasingly reliant on higher fuel margins to make ends meet, and that declining traffic and rising costs are creating what it called a vicious downward spiral (8). A Northmarq broker describes more family owners selling because they cannot keep up with costs (27). None of these is a study of forecasts. Together they describe the pattern a study should be built to catch: a station whose margin is propping up a cost base and a debt load that its volume no longer supports.

Accountability has to be built into the study. Because no outside body checks gas station projections after the fact, the study has to make itself checkable. In our practice that means five things. Every assumption carries a source and a date, so a reader can see whether it was current when the study was written. Every measure is defined, so that a fuel margin is identified as OPIS rack-to-retail, net of card fees or realized from the station’s own invoices. Judgment is labeled as judgment, so that a capture rate, a ramp or a food-program forecast is not dressed up as a benchmark. The break-even cushions are reported at every coverage level the lender uses. And the study names the metrics a lender should check at six, twelve and twenty-four months: gallons per month, realized cents per gallon, inside sales by category, labor hours and average rate, effective card fee rate and coverage.

Why that matters to a lender. A projection that misses with a documented reason is more useful in a credit file than one that hits by accident, because the lender can see which assumption failed and whether the cause is temporary. A projection built on undefined national averages cannot be diagnosed when it misses; it can only be replaced.

The errors that recur in the files we review.

• A margin percentage applied to projected revenue, so the forecast moves with crude oil rather than with the business.
• Canadian or undated margin figures cited as U.S. benchmarks.
• Ten or eleven gallons per fill where NACS reports 8.4 (33).
• Card fees carried as fixed cents per gallon, so a price spike improves the forecast instead of hurting it.
• Labor as a percentage of sales, with today’s wage held flat through a scheduled minimum wage increase.
• A fuel supply agreement read for its price and not for its incentive repayment schedule.
• An owner-operator’s earnings capitalized at a net-lease cap rate.
• A seller’s projection used to size an acquisition loan that must now be sized on historical cash flow.

Each of these makes a station look more profitable than it is, and each is avoidable with data that already exists.

What a gas station feasibility study should contain

USDA’s Appendix A gives the clearest public outline of a lender-grade feasibility study, and it works equally well as a checklist for SBA and conventional files (32). The table maps its eight sections to what each one has to cover for a fuel and convenience site, and to the evidence a lender should expect to see behind it.

New build and acquisition studies weigh the sections differently. For a new station, the market and technical sections carry the most weight: whether the trade area can support the volume, whether access permits match the traffic assumption, and what the full project cost is against the return hurdle. For an acquisition, the financial section carries the weight, because the coverage test now runs on verified history: the study’s job is to reconstruct the seller’s actual earnings line by line, adjust them for the costs that will change under new ownership, and show the structure that reaches the required coverage. In both cases the projection, the break-even and the stress cases belong in the same document, so that the lender can see the forecast and the margin for error together.

Questions owners and lenders ask about gas station profitability

How profitable is a gas station?

It depends on gross profit dollars against costs, not on a revenue percentage. Fuel produced 65 percent of the average convenience store’s sales in 2025 but 38.8 percent of its gross profit, and the street fuel margin has averaged about 40 cents a gallon since 2022 against 22 to 24 cents before 2020 (6, 7). A station is profitable when that gross profit covers labor, card fees, tank fees and fixed costs, services its debt and earns a return on its total cost above the owner’s cost of capital.

What is a typical net profit margin for a gas station?

There is no reliable current U.S. figure in the public record. The widely quoted 16.2 percent gross and 6.4 percent net margins are Statistics Canada data for Canadian stations, and the 18 percent gross and roughly 1 percent net figures attributed to IRS sole-proprietor returns carry no tax year (4, 5). RMA’s Statement Studies and the Census Bureau’s 2022 benchmarked retail tables are the right sources, and margin percentages mislead at a fuel retailer anyway because revenue moves with the price of crude (2).

How much does it cost to build a gas station?

Public operators put new large-format stores at roughly $8.6 million to $12 million each, with Yesway sizing self-funded stores at $10 million to $12 million (9, 10). An independent station can cost far less, but no reliable public per-square-foot benchmark exists; the budget should come from contractor bids, equipment quotes and the land contract, with a stated contingency.

How much do gas stations sell for?

On BizBuySell’s data for 796 sales from 2021 through 2025, the median gas station business sold for $615,000 at an average of 3.76 times owner earnings; in 2025 the median sale price was $826,000 (26). Those are mostly small, business-only transactions. Station real estate leased to a credit tenant trades at cap rates near 5.6 percent, which is not a rate for valuing an owner-operated business (27).

What changed for SBA gas station acquisition loans on October 1, 2026?

Under SOP 50 10 8.1, as summarized by lenders and valuation firms, initial acquisitions must show 1.25x coverage on historical cash flow without projections, total transaction debt is capped at an independent business valuation from a credentialed analyst, a quality of earnings report is required at a business purchase price of $3 million or more, and the business portion of the loan is limited to a ten-year term (29). The environmental requirements, including a Phase I for every gas station loan, carry forward (30).

How much do card fees cost a gas station?

Convenience retailers paid a record $21.3 billion in card fees in 2025, including $4.6 billion on taxes collected, and the average Visa and Mastercard credit rate was 2.36 percent (6, 12). At that rate a credit sale costs about 7 cents a gallon at a $3.00 pump price and about 10 cents at $4.35. Pending litigation and a proposed settlement could lower rates, but neither is final.

Does a gas station need a feasibility study to get financed?

For a USDA Business and Industry guaranteed loan above $1 million to a new business, yes (32). SBA may request one, and many lenders require one under their own credit policy for new construction and larger acquisitions. Under the new acquisition rules, the study’s most valuable job is often reconstructing verified historical cash flow rather than projecting future sales.

What does a gas station feasibility study consultant actually check?

Whether the gross profit the site can earn, in dollars and by line, covers labor at local wages, card fees at the projected price and tender mix, state tank fees and fixed costs; whether it services the debt at the program’s required coverage on the right basis, historical or projected; how far gallons and margin can fall before coverage fails; and whether the project earns a return above its cost of capital. A good study also makes each of those answers checkable after the station opens.

Related research and services

• Gas station feasibility study: scope, fees and lender requirements for fuel and convenience projects
• U.S. gas station market report, 2026 to 2035
• Why gas station feasibility studies get sent back
• The role of a feasibility study analyst in gas station studies
• Truck stop feasibility study consultant role
• Case study: fuel volume, inside sales and margin
• Case study: environmental and UST gating
• Case study: capture rate and the EV transition
• Case study: USDA B&I travel center, Winnie, Texas
• SBA feasibility study consultant and USDA feasibility study consultant
• SBA 7(a) DSCR under SOP 50 10 8.1 and SOP 50 10 8.1 projections and forecast evidence
• Debt service coverage ratio for SBA and USDA loans and the 1.25x DSCR standard: rule or convention
• Lender feasibility study requirements: OCC, SBA and USDA
• Feasibility study document checklist
• SBA loan programs, USDA loan programs and conventional bank construction loans
• Financial projections methodology and market analysis methodology
• Gas station studies by state: Texas, Georgia, Illinois, Massachusetts, Michigan, New York, Pennsylvania, Tennessee

Sources

1. U.S. Bureau of Labor Statistics, “Sectoral versus Gross Margin: Alternative Measures of Output and Labor Productivity for Retail Industries” (gasoline stations, 2004–2022)
2. U.S. Census Bureau, Annual Retail Trade Survey press releases (January 13, 2022 and 2024 releases) and 2022 benchmarked Annual Retail Trade Survey tables, released August 31, 2026
3. U.S. Bureau of Labor Statistics, labor productivity sectoral output series for NAICS 4471 and 44711, via Federal Reserve Economic Data (series IPUHN4471T300000000 and IPUHN44711T300000000)
4. Statistics Canada, Annual retail trade, 2023 (gasoline station margins, Canada)
5. Secondary tabulations of IRS data: ProjectionHub, gas station industry financial statistics (sole proprietors); BizStats, S-corporation gasoline stations (2014 data)
6. NACS, State of the Industry data for 2025, release of April 2026 (sales and gross profit mix; card fees), and NACS Magazine, June 2026
7. OPIS retail gasoline margin data as published by NACS, 2014–2025
8. Casey’s General Stores: second-quarter fiscal 2026 results release (December 9, 2025); fiscal 2026 results; Investor Day transcript (June 24, 2026); Form 10-K for fiscal 2025
9. Murphy USA Inc.: Form 10-K for 2025; C-Store Dive coverage of 2024 and 2025 build programs
10. Yesway, Inc.: Form S-1 and S-1/A (2026) and Form 10-Q for the quarter ended March 31, 2026; C-Store Dive and Convenience Store News summaries
11. U.S. Bureau of Labor Statistics, Occupational Employment and Wage Statistics: NAICS 457100 (May 2023), NAICS 447100 (May 2021), and Industries at a Glance, Gasoline Stations (2025 data)
12. Merchants Payments Coalition, citing the Nilson Report, 2025 swipe fee totals; Convenience Store News and Progressive Grocer coverage
13. NACS, statement on the proposed swipe fee settlement, November 10, 2025
14. Corner Post, Inc. v. Board of Governors of the Federal Reserve System, Eighth Circuit, October 26, 2026, as reported by the ABA Banking Journal, the Retail Industry Leaders Association and the Global Financial Regulatory Blog; related Sixth Circuit proceedings
15. Visa and Mastercard interchange settlement, preliminary approval June 9, 2026 (E.D.N.Y.), as reported by America’s Credit Unions and trade press; objections filed September 10, 2026
16. California State Water Resources Control Board, board item of May 6, 2025 (petroleum storage fee); Downey Brand, alert on the 2014 UST Cleanup Fund extension
17. Illinois Environmental Protection Agency, Underground Storage Tank Fund Guide
18. Commonwealth of Massachusetts, Petroleum Product Cleanup Fund
19. Virginia Department of Environmental Quality, Petroleum Tanks program
20. Minnesota Department of Revenue, Petroleum Tank Cleanup Fee
21. Resolve PLLC, summary of North Carolina leaking petroleum underground storage tank cleanup funds (secondary)
22. U.S. Environmental Protection Agency, Operating and Maintaining Underground Storage Tank Systems (2016); 40 CFR Part 280, including financial responsibility requirements
23. Janover, SBA 7(a) loan guide for gas station purchases (environmental and testing cost ranges; secondary)
24. Badger Institute, minimum markup laws (2026); Wisconsin Legislative Reference Bureau 2023 draft analysis; Wisconsin Administrative Register; Wisconsin DATCP Unfair Sales Act guidance; Poynter (New Jersey)
25. Federation of Tax Administrators, Motor Fuel Tax Information by State, September 2023
26. BizBuySell, Gas Station Valuation Benchmarks (sold listings 2021–2025) and Fourth Quarter 2025 Insight Report
27. B+E, convenience store cap rate reports, year-end 2025 and second quarter 2026; Northmarq commentary as reported by Bisnow via Yahoo Finance, 2026
28. Northmarq and Real Capital Analytics, as reported by Commercial Property Executive, first quarter 2026; Marcus & Millichap, Retail Outlook research brief, May 2026
29. U.S. Small Business Administration, SOP 50 10 8.1, Information Notice 5000-880695 (August 14, 2026) and technical updates under 5000-882227 (September 25, 2026), with summaries by BGH Valuation, StatementsReady, QOE Agent, the Cantrell firm, EBIT Community and JoinAccredited (secondary)
30. SBA environmental requirements under SOP 50 10 8: Partner ESI, SBA environmental flowchart and policy update (secondary); Starfield & Smith, “Best Practices: SBA Gas Station Loans,” June 2024 (secondary)
31. U.S. Small Business Administration, SOP 50 10 8 and procedural notices on 7(a) debt service coverage, including the 2026 notice revising 7(a) Small loan underwriting effective March 1, 2026; 13 CFR 120.910
32. 7 CFR Part 5001, including the definition of feasibility study in section 5001.3, sections 5001.303 and 5001.306, the refinancing coverage provisions, and Appendix A to Subpart D (85 Fed. Reg. 42556–42557)
33. NACS, Key Facts About Fueling (2025 data)
34. U.S. Energy Information Administration, Short-Term Energy Outlook, October 2026 (September 2026 retail gasoline price)