Gas Station Business Plan: Costs, Licensing & How to Start (2026)

Is a gas station profitable?

A gas station can be profitable, but the math is counterintuitive. Fuel brings in the larger share of sales dollars but the smaller share of gross profit: NACS reports that fuel produced 38.8 percent of convenience store gross profit dollars in 2025. The gross margin on gasoline was 39.7 cents per gallon in both 2025 and 2024 (an average of 38.3 cents over the past five years), and that is before expenses: NACS puts retailer expenses to sell fuel at about 20 to 25 cents per gallon, credit card fees among them (8.4 cents per gallon in 2024). The larger share of gross profit dollars comes from in-store sales. NACS reported that the US convenience store industry generated $837.4 billion in total sales in 2024, with in-store sales reaching a record $335.5 billion. A station selling 100,000 gallons per month at an assumed 30 cents per gallon gross fuel margin (a planning assumption below NACS’s 39.7 cents) earns $30,000 in fuel gross profit; that same station doing $60,000 per month in in-store sales at an assumed 35% gross margin adds another $21,000. Combined, that is $51,000 a month in gross profit, before operating expenses and debt service.

The honest risks are capital intensity and thin fuel margins. Environmental compliance is an ongoing cost, not a one-time permit fee: UST systems require leak detection monitoring, periodic testing, and eventual replacement. Branded fuel supply agreements (major oil company dealer agreements) lock in pricing and branding but may also cap your fuel margin or require costly image upgrades. A business plan that clearly models fuel volume, margin per gallon, in-store sales per square foot, and monthly DSCR will be far more fundable than one that does not.

How much does it cost to start a gas station?

Gas station startup costs vary widely by format, whether you are building new or acquiring existing, and whether the site is branded or unbranded. We have not surveyed costs ourselves. The table below sets out the five cost categories that PetroCal Associates publishes for a new station, which it describes as rough estimates. Published prices for an existing station follow the table.

Line item	Published range (PetroCal Associates)
Planning and permitting	$100,000-$400,000
Site acquisition	$0-$4,000,000
Facility construction	$2,500,000-$6,000,000
Equipment	$1,000,000-$2,000,000
Working capital	$200,000-$500,000
Total as PetroCal states it (new gas station)	$3.85 million to well over $10 million

The five rows add up to $3,800,000 to $12,900,000; the total row is the range PetroCal itself states. MMCG Invest gives the same overall range and a worked example: a BP station with 8 fueling stalls and a 3,024 square foot convenience store on a 5.40-acre site at about $6.07 million, of which hard construction is 52.2 percent ($3,169,000), equipment and fixtures 18.7 percent ($1,135,200) and land 12.4 percent ($750,000). For an existing station, CT Acquisitions puts a turnkey site with land, building, fuel canopy, tanks and an operating c-store at $1.5 million to $5 million in most US markets, premium corner sites in Florida, Texas, the Carolinas and the Northeast at $4 million to $8 million, and a business-only purchase on leased land at $150,000 to $700,000. In an acquisition, due diligence must include a Phase I and Phase II environmental assessment, since UST leaks can result in remediation liabilities exceeding the purchase price. Site acquisition is the widest range in PetroCal’s list, from $0 to $4,000,000. Branded fuel supply agreements (Shell, BP, Chevron, Marathon, etc.) provide marketing support and customer recognition but often require image upgrades. Going unbranded (independent or private-label) avoids those costs but may reduce fuel volume in brand-loyal markets. Budget a 10-15% contingency on all construction line items; gas station projects frequently encounter soil contamination, utility conflicts, or permit delays that extend timelines and budgets.

Regulation

What licenses does a gas station need?

Underground Storage Tank (UST) Registration and Permit

Federal regulations under 40 CFR Part 280 require all underground storage tanks containing petroleum products to be registered, meet technical standards for release detection, spill and overfill prevention, and corrosion protection, and be operated by a certified UST operator. Most states administer EPA-delegated UST programs and issue state-level UST permits or notifications. Under 40 CFR 280.20(e) the owner must certify proper installation by one of several listed methods, one of which is inspection and approval by the implementing agency; your state may require its own inspection before backfilling, so ask before you dig. Owners must keep release detection records; monitor tanks and pressurized piping installed after 11 April 2016 for releases at least every 30 days (40 CFR 280.41); test spill prevention equipment and the containment sumps used for interstitial monitoring of piping at least once every three years unless they are double walled and monitored, and have overfill prevention equipment inspected at least once every three years (40 CFR 280.35); and report a confirmed release to the implementing agency within 24 hours or another reasonable period the agency sets (40 CFR 280.61). Issued by: your state’s UST agency, with federal oversight from the U.S. Environmental Protection Agency under the Resource Conservation and Recovery Act (RCRA), Subtitle I.

Motor Fuel Dealer License

Where the state requires one, retail sellers of motor fuel (gasoline, diesel, ethanol blends) must hold a state motor fuel dealer or retailer license, which authorizes the sale of taxed fuel and establishes your account for monthly motor fuel excise tax reporting. Some states issue this license through the Department of Revenue; others through the Department of Energy or Agriculture. A tobacco retail license is required separately in most states if the convenience store sells cigarettes, cigars, or other tobacco products. Issued by: State Department of Revenue, Department of Taxation, or Department of Energy (varies by state).

Weights and Measures Requirements for Fuel Dispensers

Before any fuel is sold, your dispensers must meet your state’s weights and measures requirements. Depending on the state, that means a test by a state or county weights and measures inspector or, as in Texas, registration with the Department of Licensing and Regulation and a device performance review by a licensed service company at least once every two years. Ask your state program what it requires before you open and how often devices are re-tested. Issued by: your state or county weights and measures program (the agency varies by state).

Certificate of Occupancy

A certificate of occupancy (CO) is required before the convenience store may open to the public. The CO is issued by the local building department after successful completion of final building, electrical, plumbing, mechanical, fire suppression, and fire alarm inspections. For a gas station, the fire marshal separately inspects the fuel dispensing system, emergency shutoff, secondary containment, and above-ground equipment. If the c-store sells prepared or perishable food, a health department inspection and food service permit are required in parallel. Issued by: Local building department (CO), local fire marshal (fuel dispensing approval), and local health department (food service permit if applicable).

Regulatory requirements for gas stations are layered across federal, state, and local agencies, and the environmental track is typically the most time-consuming. The EPA and state UST agencies govern UST installation and operation under RCRA Subtitle I (40 CFR Part 280). Fire marshals regulate fuel dispensing systems and secondary containment under NFPA 30A. State departments of revenue or energy govern motor fuel dealer licensing and excise tax reporting. State or county weights and measures programs regulate dispensers. Local zoning, building, and health departments govern the convenience store and site. For acquisitions, always include a Phase I and Phase II environmental site assessment in due diligence; historic UST leaks are the most common source of undisclosed liability in gas station transactions. Engage an environmental attorney and a petroleum consultant experienced in your state alongside your general legal and financial advisors.

What must your gas station business plan contain?

A gas station business plan for SBA or investor review must address the unique dual-revenue structure of the fuel forecourt and the convenience store in a single integrated financial model. It should cover five elements: (1) a site analysis with traffic count data, competitive radius map, and fuel volume projection (gallons per day and per month) with pricing assumptions tied to local rack and street price benchmarks; (2) a detailed startup cost budget with land contract or appraisal, contractor and equipment quotes, tank system specifications, and environmental compliance costs; (3) a 5-year monthly proforma with fuel revenue and gross margin modeled separately from in-store revenue and gross margin, showing combined EBITDA and monthly DSCR against the SBA floor for your loan type (set out below); (4) a Phase I or Phase II environmental report summary, confirming no known contamination liability on the target site; and (5) for branded locations, a summary of the fuel supply agreement terms and any capital upgrade obligations imposed by the oil company brand. A plan that models fuel margin as a flat percentage without a cents-per-gallon analysis, or that omits the in-store gross margin breakdown, leaves the coverage figure hard to test.

On coverage, SOP 50 10 8.1 (in effect since 1 October 2026) sets no single SBA ratio. A Standard 7(a) loan, one greater than $350,000, needs a ratio “equal to or greater than 1.15 on a historical and/or projected cash flow basis”, reached within 2 years of loan funding or of the end of construction where the case rests on projections. A 7(a) Initial Acquisition, the default category for a change of ownership such as the purchase of an existing station, needs 1.25:1 on the last fiscal year-end or an average of the last two. Appendix 15 has an exception: for an owner-occupied Special Purpose Property whose appraised value fully collateralizes the loan, the lender may rely on projections that reach the ratio within two years of funding. Whether a station qualifies is a determination the lender must document, so ask. A 504 loan needs 1.15:1 on a historical basis, with at least 2 years of projections analyzed where history does not show it. Your lender or Certified Development Company (CDC) also applies its own credit analysis, so ask which figure it will underwrite to; our SBA debt service coverage guide sets out each floor by loan type.

How do you fund a gas station?

The SBA 504 program provides “long-term, fixed rate financing for major fixed assets”, which fits gas station real estate and major capital improvements. SOP 50 10 8.1 lists gas stations among its examples of Limited or Special Purpose Property (Section C, Chapter 1), so the borrower must contribute at least 15 percent of the project, against the 10 percent minimum for all borrowers, and at least 20 percent if the business is also a New Business. That means one “in operation for 2 years or less at the time the loan is approved”, and a station in operation for longer may still be considered one where a change of ownership will result in “new, unproven ownership/management and increased debt unrelated to business operations”. The debenture, issued through a Certified Development Company (CDC), then finances no more than 35 percent, or 30 percent at the 20 percent tier, and the SOP says that generally “a Third Party Lender provides 50% or more of the financing”. The 504 loan runs 10, 20 or 25 years, with a maximum of 25 years for real estate.

A Standard 7(a) loan (maximum $5,000,000) can fund the purchase of an existing station, and may combine land and building, machinery and equipment, and working capital in one loan. It may carry a fixed or variable interest rate, and its equity rule is separate from the 504 contribution: at least 10 percent of total project costs for a Start-Up Business (in operation for 1 year or less), and a 10 percent minimum for an Initial Acquisition that cannot be reduced or eliminated. Specialty petroleum lenders and some regional banks have dedicated gas station lending programs and understand UST compliance, fuel supply agreements, and cents-per-gallon margin modeling. SBA’s 504 loans page lists a feasible business plan among the program’s general eligibility standards. Whichever lender you approach, have ready a formal business plan, 3 years of personal (and business, if applicable) tax returns and a personal financial statement, and budget for a Phase I environmental report and a site appraisal: for a 504 loan the SOP says that when the collateral is a Special Purpose Property, “the appraiser must be experienced in the particular industry”.

FAQ

Does an SBA loan for a gas station need a Phase I environmental assessment?

Yes, where the station’s real estate or its fuel equipment secures the loan. SBA lists environmentally sensitive industries at Appendix 6 of SOP 50 10 8.1, in effect since 1 October 2026, and your category is on it:

457 GASOLINE STATIONS & FUEL VENDORS (not required for propane or firewood dealers)

The bracket excepts propane and firewood dealers and nothing else. The lender compares the list with the NAICS codes for “the Property’s current and known prior uses” (units in a Multi-Unit Building excepted), so a site known to have been a gas station matches whatever you plan to run on it, and stations have a sentence of their own: “If the NAICS code begins with 457 (gas stations with or without convenience stores), the Environmental Investigation must begin with a Phase I”, and the lender must also comply with Appendix 7 where it applies.

For a station, that closes the cheaper starting points: with no Appendix 6 match a loan of up to and including $250,000 may begin with an Environmental Questionnaire, but a 457 code starts at a Phase I whatever the loan amount. Our SBA environmental requirements guide sets out every step and all 55 Appendix 6 entries.

Appendix 7 reaches the tanks and pumps as well as the land. It covers loans secured by real property or by “gas station fixtures or equipment such as tanks, pumps, lines, etc.” currently used to operate a gas station. The Phase I must be conducted by an independent Environmental Professional, and the investigation must include a determination whether the station complies with any regulatory requirements for tank and equipment testing: “A loan may not be disbursed until full compliance is achieved.” Appendix 7 does not make a Phase II automatic (commissioning one in a purchase, as this page suggests, is a buyer’s precaution): the investigation must include the results of any further investigation the Environmental Professional recommends, “which may include a Phase II”. If the Property is contaminated and the lender still proceeds, then in a change of ownership the SBA Indemnification Agreement “must always be obtained and signed by the seller” (waivers are case by case, and a seller’s unwillingness alone is not a sufficient basis for one), so raise it before you sign a purchase agreement.

The requirement follows the collateral, not the lease or the purchase: Appendix 7 does not apply where the applicant “only leases the real or personal property and neither the real nor personal property is used as collateral for the loan”. Ask your lender what collateral it will take. None of this makes a station unfinanceable, but it belongs in the diligence budget and the timeline before you sign. You can also check your equity position with our free SBA equity requirement calculator.

Frequently asked questions

How much does it cost to open a gas station with a convenience store?

Published estimates put a new-build gas station with a convenience store at $3.85 million to well over $10 million (PetroCal Associates; MMCG Invest), covering planning and permitting, site acquisition, facility construction, equipment, and working capital. We have not surveyed costs ourselves. In the MMCG Invest worked example of about $6.07 million, hard construction is 52.2 percent of the budget and land 12.4 percent. CT Acquisitions puts a turnkey existing station with real estate at $1.5 million to $5 million in most US markets.

How much profit does a gas station make per gallon of fuel?

NACS puts the gross margin on gasoline at 39.7 cents per gallon in both 2025 and 2024, and at an average of 38.3 cents over the past five years. That is before expenses: NACS says retailer expenses to sell fuel are about 20 to 25 cents per gallon, credit card fees among them (8.4 cents per gallon in 2024). Fuel produced 38.8 percent of convenience store gross profit dollars in 2025; in-store sales produced the rest.

What permits and licenses does a gas station need?

At minimum you need a general business license where your jurisdiction requires one, a state motor fuel dealer license where your state requires one, underground storage tank (UST) registration and any permits from your state UST agency under EPA 40 CFR Part 280, weights and measures testing or registration for each fuel dispenser under your state program, a certificate of occupancy from the local building department, a sales tax permit where your state has a sales tax, and a fire marshal approval for the fuel dispensing system. If the c-store sells tobacco, a separate tobacco retail license is required in most states.

Can I get an SBA loan for a gas station?

Yes. Both the SBA 504 and SBA 7(a) programs can finance a gas station. SOP 50 10 8.1 lists gas stations among its examples of Limited or Special Purpose Property, so a 504 project needs a borrower contribution of at least 15 percent, or 20 percent for a New Business (in operation for 2 years or less), against the standard 10 percent; the debenture then finances no more than 35 or 30 percent. A Standard 7(a) loan (up to $5 million) can fund the purchase of an existing station. On coverage the SOP sets no single ratio: 1.15 for a Standard 7(a) loan, 1.15:1 historical for a 504 loan and 1.25:1 for a 7(a) Initial Acquisition. Your lender also applies its own credit analysis, so ask which figure it will underwrite to.

What is a UST and why does it matter for buying a gas station?

A UST is an underground storage tank used to hold gasoline, diesel, or other petroleum products below grade. Federal regulations under 40 CFR Part 280 set strict standards for release detection, corrosion protection, spill prevention, and operator training. In an acquisition, an undetected UST leak can result in soil and groundwater remediation liability that exceeds the purchase price of the station. Always require a Phase I and Phase II environmental site assessment as part of due diligence, and include remediation responsibility language in the purchase agreement. Under 40 CFR 280.20, tanks installed or replaced after 11 April 2016 must be secondarily contained and use interstitial monitoring.

Reviewed by Muhammad Tayyab Shabbir, Founder of AVVALE. Our team has prepared funding documents for 500+ businesses across regulated, capital-intensive and main-street industries, from SBA and bank loans to investor and visa applications.

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Sources: NACS (National Association of Convenience Stores), U.S. Convenience Store Count (2026 NACS/NIQ TDLinx count) and Key Facts About Fueling (gasoline gross margin, expenses to sell fuel and card fees), and the NACS State of the Industry releases of 9 April 2025 (2024 sales) and 15 April 2026 (2025 gross profit share), all on convenience.org and read 13 October 2026; MMCG Invest, Gas Station Construction Cost Breakdown (mmcginvest.com, published 4 June 2025, updated 28 March 2026, read 13 October 2026) for the overall range and the worked example; MMCG Invest, "U.S. Fuel Prices Change Forecast 2026: Impact on Gas Stations' Margins and Profitability" (mmcginvest.com, 2026); PetroCal Associates, How Much Does it Cost to Build a Gas Station? (petrocalassociates.com, published 18 September 2023, modified 31 October 2024, read 13 October 2026) for the five cost categories and the stated total; NACS, "Who Makes Money Selling Gas?" (convenience.org); CT Acquisitions, How Much Does a Gas Station Cost? 2026 Buyer’s Guide (ctacquisitions.com, modified 5 October 2026, read 13 October 2026) for prices of existing stations; SBA SOP 50 10 8.1 (effective 1 October 2026; Section A, Chapter 5, Paragraph E; Section B, Chapter 1; Section C, Chapter 1; Appendices 3, 6, 7, 15, 17 and 18) and SBA’s 504 loans page, both read 12 October 2026, for the SBA rules; 40 CFR 280.20 (new UST systems), 280.35 (periodic testing of spill and overfill equipment), 280.41 (release detection), 280.61 (reporting a confirmed release) and 112.1 (where the SPCC rule applies), law.cornell.edu, read 13 October 2026; Utah State Tax Commission, Fuel Tax Licensing Requirements (tax.utah.gov/fuel/licenses, Internet Archive capture of 11 December 2025, read 13 October 2026); for the state and local examples, all read 13 October 2026: Texas Department of Licensing and Regulation, Compliance Guide for Motor Fuel Metering and Quality; Office of the Texas Governor, Start a Business, and City of Phoenix, License Services (neither has a general business license); Oregon Department of Revenue, Sales Tax in Oregon (no general sales tax); Ohio Department of Commerce, Bureau of Underground Storage Tank Regulations; U.S. EPA, "Underground Storage Tanks: Technical Compendium" (epa.gov, 40 CFR Part 280). The cost and price figures are other publishers’ estimates, attributed where they appear; we have not surveyed costs ourselves. The SBA, EPA and state rules on this page are general information, not lending, legal or environmental advice: confirm them with your lender or CDC, your state agencies and an Environmental Professional.

Gas Station Business Plan: Costs, Licensing & How to Open One (2026)

Is a gas station profitable?

How much does it cost to start a gas station?

How do you start a gas station?

Choose your format and site

Conduct a Phase I and Phase II environmental assessment

Register underground storage tanks and obtain environmental permits

Check motor fuel licensing and obtain a sales tax permit

Pull building permits and begin construction

Meet weights and measures requirements for your pumps

Finalize your fuel supply agreement

Pass final inspections and obtain your certificate of occupancy