Service Station Property Loans from 6.50% - 9.00%

Yes, you can purchase a service station through your SMSF and lease it back to your operating business, but strict compliance rules apply. The lease must be at market rates (arm’s length), your SMSF can borrow up to 80%% LVR for service station properties, and you’ll need independent valuations plus proper lease documentation.

This structure offers significant tax advantages as rental income in your SMSF is taxed at just 15% as at 2025 (or 0% in pension phase), while you build equity in a commercial asset outside your business.

Learn more about SMSF commercial property rules and how they apply to fuel retail properties. The Australian Taxation Office provides detailed guidance on related party SMSF property transactions here. 

We find that deposit requirements vary significantly depending on the operator structure. Independent service stations typically require 30-40% minimum deposit due to higher perceived risk, while major brand franchises (Shell, BP, Caltex) can access 20-30% deposits with strong trading history.

Owner-operators purchasing the property and business together may qualify for deposits as low as 20% if they demonstrate fuel retail experience and strong throughput numbers (150,000+ litres/month). The key differentiator is your fuel supply agreement strength – major oil company supply agreements significantly improve lending terms. We’ve arranged owner-occupier commercial property loans for similar business-critical assets and understand the nuances lenders assess.

Environmental compliance can be a critical factor in service station financing. Our lenders often require Phase I and Phase II environmental assessments before they can approve any fuel retail property loan. While sites with current contamination can still be financed, they typically require:

(1) lower LVR (around 50-60% maximum),
(2) remediation cost holdback from loan proceeds,
(3) environmental insurance coverage, and
(4) clear remediation timeline with qualified contractors.

Properties with a clean Phase II report and a compliant Underground Storage Tank (UST) systems can access better interest rates, while contaminated sites could face a 1-2% rate premium.

The Australian Government’s National Environment Protection Council provides guidelines on site contamination assessment.

Yes, we can help you get construction and conversion finance if you are planning to develop or build a service station which is typically structured as a progress payment type loan.

New builds normally require:

• secured fuel brand supply agreement (5+ years),
• council development approval,
• traffic count studies,
• detailed construction budget.

New construction projects access up will often need a deposit in the region of 35-40% plus working capital for fit-out and fuel inventory. Most our our lenders require presale or prelease commitments before funding drawdown.

Our experience with commercial construction loans includes multiple fuel retail projects with major brands.

Most lenders assess fuel throughput as the primary serviceability metric for service station loans.

We find that the minimum viable throughput is typically 150,000 litres/month for standard approval, while premium terms (higher LVR, better rates) require 200,000+ litres/month. For highway locations and truckstops, 300,000+ litres/month is common.

In addition to fuel volume Australian lenders evaluate:

• convenience store contribution (20-30% of revenue is strong),
• location demographics,
• competing stations within 5km.

Sites doing under 100,000 litres/month can face significant challenges securing traditional finance and may require alternative lenders at premium interest rates. We advise clients to consider sites with strong non-fuel revenue streams (like retail property with attached shops) which can diversify income.

Having supply agreements in place with companies like Shell, BP, Caltex, Ampol, or 7-Eleven can significantly improve your potential lending terms.

Major brand agreements (10+ years) can increase your LVR, reduce interest rates by 0.5-1.0%, and unlock faster approvals. Properties with major brand agreements often qualify for similar favorable terms because the brand essentially acts as a form of tenant covenant.

This is a crucial distinction affecting your commercial finance structure entirely.

Freehold purchase means you own both property and business – you can access 6.50% – 9.00%% property loans with 30% – 50%% deposits, build equity, and control the site.

Franchise agreements typically involve licensing the site from the oil company – you’re financing business assets (fuel inventory, equipment, goodwill) rather than real estate, facing higher rates with asset finance terms. Some franchise models include property sale-leaseback where the franchisee purchases the property, which offer equity building while maintaining brand support.

We structure finance for both models and can show you options if you’re considering franchise-only approaches versus property acquisition.

Yes, our clients user service station refinancing to fund capital improvements including Underground Storage Tank (UST) replacement, forecourt upgrades, car wash additions, or convenience store expansions.

Refinancing lets you access equity growth while improving the asset. Current market commercial property refinance rates start from % for established service stations with clean environmental assessments.

Critical consideration however – refinancing may trigger a new environmental due diligence, so address contamination issues proactively. Many operators combine refinancing with owner-occupier commercial property loans if transitioning from business loan structures.