After arranging petrol station finance for over 15 years, and helping over 3,300 Australian business owners, I understand the unique challenges of financing these specialised commercial properties. Whether you’re buying your first service station or expanding an existing portfolio, this guide covers everything you need to secure the right petrol station finance.
The Australian Petrol Station Market in 2025
Australia’s petrol and service station industry continues to evolve beyond traditional fuel sales. With approximately 7,000 stations nationwide, modern service stations increasingly resemble mini retail hubs offering convenience stores, QSR franchises, electric vehicle charging, and even medical services.
Current Market Dynamics
Market Factor |
2025 Status |
Impact on Finance |
|---|---|---|
Average Station Value |
$2.5M – $8M metro $1.5M – $4M regional |
Higher deposits required |
EV Charging Integration |
35% have or plan EV infrastructure |
Additional capital needed |
Non-Fuel Revenue |
40-60% of gross profit |
Improves serviceability |
Environmental Compliance |
Stricter regulations since 2024 |
Higher due diligence costs |
Industry Consolidation |
Major brands acquiring independents |
Competition for quality sites |
The shift toward convenience retail means modern petrol stations generate substantial income from coffee sales, quick-service restaurants, parcel collection points, and convenience items. This diversification actually strengthens loan applications, as multiple revenue streams reduce risk for lenders.
Petrol Station Finance Requirements
Current Lending Criteria (2025)
Petrol station finance sits within the specialised commercial property loans category, with specific requirements reflecting the industry’s unique risks and opportunities:
Finance Parameter |
Typical Range |
Best Case Scenario |
|---|---|---|
Deposit Required |
30% - 50% |
30% with strong financials |
Maximum LVR |
50% - 70% |
Up to 70% |
Interest Rates |
6.50% - 9.00% |
From 6.50% |
Loan Terms |
15-25 years |
Up to 30 years |
Assessment Rate Buffer |
2.5-3.0% above rate |
2.5% minimum |
Key Performance Metrics Lenders Evaluate
When assessing petrol station finance applications, lenders focus heavily on operational metrics that demonstrate business viability:
Fuel Volume Analysis
- Daily fuel sales (litres): Minimum 3,000L/day for regional, 5,000L+ for metro
- Fuel margin trends: Looking for stable or improving margins
- Brand vs independent pricing power
- Historical volume consistency over 2+ years
Shop Performance Metrics
- Shop sales as percentage of total revenue (target: 25%+)
- Gross profit margins on convenience items (typically 25-35%)
- Coffee/food service contribution
- Average transaction values and customer frequency
Location Assessment
- Traffic count data and patterns
- Competition within 5km radius
- Population growth projections
- Major infrastructure changes planned
Loan Structure Options
Comparing Structures for Petrol Station Finance
Different ownership and operational models require different finance approaches. Here’s how each structure works:
Structure Type |
Best For |
Pros |
Considerations |
|---|---|---|---|
Owner-operators wanting full control |
• Own land & business • Maximum equity growth • Complete control |
• Highest capital requirement • Full operational responsibility |
|
Leasehold Business |
Lower capital entry |
• Lower upfront cost • Easier entry • Less environmental risk |
• No property appreciation • Lease renewal risks • Rent increases |
Investment + Lease |
Property investors |
• Passive income • Professional operator • Property appreciation |
• Tenant risk • Lower net yields • Management needed |
Retirement planning |
• Tax advantages • Retirement asset • Lease to related party |
• Strict compliance • Limited to 70% LVR • No recourse to other assets |
For detailed information on structuring commercial property purchases, visit our commercial property purchase loans guide.
The Application Process
Your Roadmap to Petrol Station Finance Approval
Successfully financing a petrol station purchase requires thorough preparation and strategic presentation. Here’s my proven process:
Phase 1: Pre-Application (Weeks 1-2) Start with a professional feasibility assessment. I’ll review the station’s financials, analyse market conditions, and determine realistic borrowing capacity. This phase includes obtaining vendor financial statements, commissioning traffic studies if needed, and reviewing environmental reports.
Phase 2: Finance Structuring (Week 3) Based on the feasibility assessment, I help structure the optimal finance solution. This involves selecting the right lender mix, determining the best ownership structure, optimising tax efficiency, and planning for working capital needs beyond the purchase.
Phase 3: Formal Application (Weeks 4-5) With structure determined, valuations and sale contracts in place, I prepare and submit your application with comprehensive supporting documentation:
Essential Documentation Package:
- 3 years of vendor’s financial statements and tax returns
- Detailed business plan with growth strategies
- Your personal financial position and business experience
- Environmental assessment reports (Phase 1 minimum)
- Current fuel supply agreements and terms
- Competition analysis within 5km radius
- Professional valuation from petroleum-specialist valuer
Phase 4: Assessment & Negotiation (Weeks 5-7) During lender assessment, I help manage the process, responding to queries immediately, negotiating terms and conditions, coordinating valuations and inspections, and ensuring environmental compliance.
Phase 5: Approval & Settlement (Weeks 7-8) Once approved, I coordinate settlement including finalising loan documentation, arranging insurance requirements, coordinating settlement logistics, and ensuring smooth transition.
Typical Timeline Comparison
Scenario |
Standard Timeline |
Fast Track Option |
|---|---|---|
Metro branded station |
6-8 weeks |
4-5 weeks* |
Regional independent |
5-7 weeks |
3-4 weeks* |
Multi-site portfolio |
8-12 weeks |
6-8 weeks* |
*Fast track available with complete documentation and clean environmental status
Common Challenges & Solutions
Environmental Compliance: The Biggest Hurdle
Environmental issues remain the primary challenge in petrol station finance. Modern lenders require comprehensive environmental assessments, and any contamination can derail financing entirely.
Managing Environmental Risks: Always commission a Phase 1 Environmental Site Assessment (ESA) before making an offer. If issues are identified, a Phase 2 ESA with soil and groundwater testing becomes essential. Factor remediation costs into your offer price if contamination exists, and ensure vendor warranties cover unknown contamination. Consider environmental insurance for additional protection, especially for older sites. Work with specialist environmental consultants familiar with petroleum sites, and never skip environmental due diligence to save costs.
Fuel Supply Agreements: Understanding Your Obligations
Fuel supply agreements significantly impact financing options and business flexibility:
Branded vs Independent Considerations
Branded Stations (Shell, BP, Ampol, etc.):
- Typically require 5-10 year fuel supply commitments
- May offer rebates or support but at premium wholesale prices
- Brand standards require regular upgrades and maintenance
- Some lenders prefer branded stations for perceived stability
Independent Stations:
- Greater flexibility in fuel sourcing and pricing
- No forced upgrades or brand standards
- Potentially higher margins but requires stronger management
- May need to demonstrate stable supply arrangements
Competition from EV Charging
The rise of electric vehicles presents you with both challenges and opportunities to be aware of.
Progressive petrol station owners are installing EV fast chargers to capture new revenue streams, expanding convenience offerings to increase dwell time, adding service bays for EV servicing, and developing subscription models for regular customers. I am seeing lenders increasingly favor applications that have a clear and demonstrated EV transition planning. Be sure to include your EV strategy in your business plan, showing how you’ll adapt to changing fuel demand over the loan term.
Working Capital Management
I’ve seen some petrol station purchases fail due to inadequate working capital planning. Always know your numbers.
Working Capital Requirements Beyond Purchase Price:
Expense Category |
Typical Amount |
Notes |
|---|---|---|
Initial fuel purchase |
$80,000 – $150,000 |
Based on tank capacity |
Shop inventory |
$30,000 – $60,000 |
Varies by shop size |
Operating expenses |
$20,000 – $40,000 |
First month buffer |
Marketing/relaunch |
$10,000 – $25,000 |
Critical for independents |
Contingency fund |
$30,000 – $50,000 |
Equipment repairs, etc. |
Total Additional |
$170,000 – $325,000 |
Above purchase price |
Maximising Your Approval Chances
What Makes a Strong Application in 2025
Based on successful petrol station finance applications I’ve been a part of, the strongest candidates demonstrate:
Industry Experience: While not mandatory, relevant experience significantly improves approval chances and terms. This includes previous petrol station ownership or management, broader retail or hospitality experience, franchise operation background, or strong business management track record in any industry. If you lack direct experience, consider partnering with an experienced operator, hiring an experienced manager before settlement, engaging a petroleum consultant for the first year, or completing industry training programs.
Financial Strength Indicators: Lenders want to see clear financial capacity beyond just the deposit:
- Liquid assets equal to 6+ months operating expenses
- Additional security properties or assets
- Clean credit history with no defaults
- Demonstrated savings discipline
- Multiple income sources or business interests
Professional Presentation: A professionally prepared application stands out:
- Comprehensive bank loan business plan with 3-year projections
- Detailed market analysis and competition assessment
- Clear growth strategies and revenue diversification plans
- Professional valuation from petroleum-specialist valuer
- Environmental reports from recognised consultants
Service Station Finance Calculator
Estimate Your Petrol Station Loan Repayments
Petrol Station Repayments Calculator
Calculator for illustration only. Actual rates and terms subject to lender assessment.
Regional Considerations
Different locations present unique challenges for lending, but also opportunities:
Metropolitan Stations
Typically attract higher commercial property purchase prices but stronger cash flows, more competition requiring differentiation strategies, better access to alternative revenue streams, and typically easier to finance with more lender options.
Regional & Rural Stations
Can mean lower entry prices but variable revenues, less competition but smaller customer base, critical community infrastructure status can help, and may qualify for regional development incentives.
Highway & Travel Stations
Subject to seasonal fluctuations that require careful planning, heavy vehicle facilities that command premiums, accommodation additions that increase value, and strong locations highly sought by investors.
For location-specific commercial property finance options, compare our guide to loans by commercial property location.
Frequently Asked Questions
How much deposit do I really need for a petrol station?
While the minimum deposit is 30%, most successful applications have 35-40% deposit. This provides better rates, more lender options, and crucial working capital reserves. Strong operators with excellent financials occasionally secure 70% LVR (30% deposit), but this is exceptional.
Can I buy a petrol station with no industry experience?
Yes, but expect stricter lending criteria. Lenders may require a larger deposit (40-50%), professional management agreements, detailed transition planning, or an experienced business partner. Your broader business experience and financial strength become even more critical.
What about buying through my SMSF?
SMSF purchases are possible and increasingly popular for petrol stations. Requirements include maximum 70% LVR, lease to unrelated parties (or related party at market rates), strict compliance with SIS Act, and total SMSF assets should be 3x the loan amount. See my SMSF commercial property loan guide for details.
How do environmental issues affect finance?
Any contamination significantly impacts financing. Minor historical contamination with remediation plans may be acceptable to some lenders. Active contamination typically prevents conventional finance until remediated. Always get Phase 1 ESA before making offers, and budget $5,000-$8,000 for environmental assessments.
Should I buy branded or independent?
Both have merits. Branded stations offer established systems, marketing support, and perceived stability, but with higher costs and less flexibility. Independent stations provide better margins, complete flexibility, and no forced upgrades, but require stronger management and marketing. Your experience level and business goals should guide this decision.
Next Steps: Securing Your Petrol Station Finance
The petrol station industry continues evolving, creating opportunities for prepared buyers. Success requires understanding the unique challenges, preparing comprehensive documentation, and working with specialists who understand petroleum industry finance. Ready to explore your petrol station finance options? I’ve helped arranged financing for dozens of successful petrol station purchases across Australia. I understand the complexities and can guide you through every step.
Get Your Petrol Station Finance Pre-Approval → Or call me directly on 1300 262 098 for a confidential discussion about your plans.
