Cedarland Lending, a small-business funding service in Roswell, NM, sets out the records partners commonly ask for when someone buys or improves a gas station in Chaves County, NM: seller financials, fuel and store sales, the supply agreement, equipment ages, environmental reports and the buyer's own finances. Census Bureau figures frame the local market.
The local picture
Chaves County, NM had 27 gasoline station employer establishments in 2023, with 344 employees and about $10.0 million in annual payroll (County Business Patterns 2023). Retail trade overall had 200 employer establishments, more than any other sector in the county. A station is a retail business with a fuel business attached, and partners review both halves.
1. Seller financials
- Three years of the business's tax returns
- Monthly profit and loss statements for the current and prior year
- Bank statements that support the reported sales
Partners compare these with each other. Large gaps between tax returns and reported sales are the commonest reason a station request stalls.
2. Fuel and store sales, separately
Fuel gallons and fuel margin per gallon tell one story; in-store sales by category tell another. Ask the seller for both by month. A partner will look at whether the store, which usually carries the better margin, can support the debt if fuel volume dips.
3. The fuel supply agreement
Branded stations operate under a supply agreement with terms on volume, branding and its remaining length. Partners want to see the agreement and whether it transfers to a buyer. Unbranded stations show their supplier arrangements instead.
How a station purchase price is usually split
A commercial loan for a gas station is rarely one undivided number. Reviewers break the price into parts, because each part is checked against a different record:
| Component | What a reviewer checks | Document to have |
|---|---|---|
| Land and building | Value and site condition | Purchase agreement, survey, environmental reports |
| Tanks, dispensers, canopy | Age, upgrades and remaining life | Equipment list with installation dates |
| Store inventory | What is actually on the shelves | An inventory count signed by buyer and seller at closing |
| Goodwill | Whether earnings support the premium | Tax returns and monthly profit and loss |
Goodwill is the part partners scrutinize hardest, since nothing physical stands behind it. A seller asking a high premium over the value of land, equipment and stock should be able to show the earnings that justify it.
4. Equipment list and ages
- Underground storage tanks: installation dates and any upgrades
- Dispensers and point-of-sale systems
- Coolers, ice machines and food-service equipment
- Canopy, lighting and signage
Older equipment is not a deal-breaker, but it shifts the budget. Replacing dispensers or coolers after purchase is often funded through equipment financing; the gas station and c-store page covers both purchase and improvement funding.
5. Environmental items
Fuel sites carry environmental questions that ordinary retail does not. Partners commonly ask for environmental reports on the site.
A business loan to buy a gas station: the timeline
- Letter of intent, with access to the seller's records written into it.
- Seller financials, monthly fuel gallons and store sales, collected and compared.
- Supply agreement reviewed, and the brand or supplier asked how a new operator is approved.
- Environmental review of the site, with your attorney.
- Funding request sent with the price split, the buyer's documents and the first-year plan.
- Inventory counted and fuel in the tanks measured at closing.
Steps three and four often take longer than the funding review, so start them as soon as the letter of intent is signed. A new operator may also have to open fresh credit with the fuel supplier, which affects how much cash the first weeks need.
Convenience store business loan: no pumps, different questions
Without fuel there is no supply agreement and no tanks, so the review leans on the lease and the shelves. How many years remain on the lease, whether it can be assigned to a buyer, and how much of the price is inventory rather than goodwill become the main questions. Pass-through lines such as lottery, money orders and bill payments should be shown separately, because they swell gross sales without adding much margin.
Retail is the most common kind of employer in ZIP 88203: 52 retail trade establishments in 2023, 40.4% of them with fewer than five employees (ZIP Code Business Patterns 2023). At the smaller ones the seller may also be the bookkeeper, and the records can be thin. Ask early for bank statements to back up the sales figures.
Putting the package together
Assemble the seller's records, the supply agreement and the equipment list into one folder before contacting any partner, and add a one-page summary: price, down payment, what is included (land, building, equipment, inventory) and your plan for the first year. Partners reviewing a station purchase often ask for the same items in the same order; having them ready shortens the back-and-forth and makes the request easier to compare across partners.
6. The buyer's side
- Personal financial statement and credit history
- Retail or station management experience
- The down payment and where it comes from
- A plan for the first year: staffing, hours, any improvements
Most purchases use a term loan, sometimes with real estate financing for the land and building. Test what the payment looks like with the acquisition loan calculator before you make an offer. County business counts are on the Roswell, NM page, and other articles are on the blog.
By Cedarland Lending · Updated