How to Buy a Petrol Station: How the Finance Works
Property Lending Hub
Service station finance · Listing terms · Fuel supply agreements · Tank evidence
Buying a petrol station runs from the first listing to the first fuel delivery you pay for. The lender reads what you are buying, the lease and fuel agreement, litres and margin, tank and environmental evidence, the valuation and the cash you still need outside the loan. This guide follows that whole purchase path from a broker's side of the file.
Quick Answer
To buy a petrol station with finance in Australia, first work out whether you are buying the land, the trading business or both. Then test the listing's litres and margin, the lease and fuel agreement, tank and environmental evidence, and the value a lender will accept. The deposit is only one part of the cash required: SAV, bonds, duty, reports and working capital can sit outside the purchase loan.
Also called: service station finance, petrol station loans, fuel station finance. Same thing: "petrol station" is how buyers search, "service station" is the industry term lenders and valuers use.
How do you buy a petrol station with finance in Australia?
To buy a petrol station with finance, decide what interest you are buying, get the fuel supply agreement, tank evidence and trading figures in front of a lender, and apply before the contract's finance date. Lenders call it a service station and assess it as specialised security, so the file is built around the site, the fuel agreement and the trading.
If the land comes with the purchase, the finance usually starts as a commercial property loan. If you are buying only the business, it reads more like financing a business purchase, with the fuel contract doing much of the work that property would otherwise do. Here is the order we work through a service station file in, from the first listing to the first months of trading.
- Read the listing the way a lender will. Price plus SAV, litres, shop sales and the lease terms each point to evidence the lender will ask for.
- Decide what you are buying. Freehold, freehold going concern, leasehold business or an operator arrangement on a supplier's site. Each is a different loan.
- Read the fuel supply agreement and its remaining term. It is the income contract, and its term can cap the loan term.
- Get the trading figures in litres and margin. Monthly litres, cents per litre earned, shop sales and shop gross margin, not headline turnover.
- Get tank and site evidence before exchange. Integrity results, leak monitoring records and an environmental site assessment where one exists or can be commissioned.
- Work out the total cash you need, not just the deposit. Stock, duty, reports, bonds and working capital sit on top of the lender's contribution.
- Sign with the right conditions and apply before the finance date. Finance, supplier consent, landlord consent and satisfactory due diligence, matched to a bank, non-bank or private lender that fits the file.
- Settle, then fund the first months. The stocktake, licence transfers, and working capital for fuel deliveries and wages.
| Figure | Value | Basis and qualifier | Source and date |
|---|---|---|---|
| Minimum fuel re-selling agreement term | 5 years; 9 years in total with the renewal option where the supplier owns or leases the site | Subject to limited exceptions; the Code's regulations are due to sunset on 1 April 2027, and a government review found they should be remade | ACCC, updated 13 July 2026 |
| Oil Code volume threshold | 30,000 litres a month, about 1,000 litres a day | The Code does not apply where the supplier reasonably believes the site will average less than this and gives written grounds at least 3 days before | ACCC, updated 13 July 2026 |
| Disclosure period before a fuel agreement | 14 days | The supplier must give the Code and a disclosure document before the agreement is signed or non-refundable money is paid | ACCC, updated 13 July 2026 |
| Cooling-off period on a fuel agreement | 7 days | From signing or paying money under the agreement, whichever comes first | ACCC, updated 13 July 2026 |
| Average gross indicative retail difference, petrol | 17.9 cents per litre | Five largest cities, December quarter 2025; it covers operating costs and profit, so it is not net profit and not an estimate for any site | ACCC petroleum market report, published March 2026 |
| Temporary fuel tax relief | 32 cents per litre overall, then 16 cents per litre | 1 April to 30 June 2026, then 1 July to 2 August 2026; the 32 cents included a 5.7 cent equivalent from states forgoing GST on fuel; historical | ACCC, 29 June 2026 |
| Bank valuation marketing period | Up to 12 months, or up to 24 months for specialised property | An assumption APRA's APS 220 requires of banks when valuing property security, the longer period where valuers advise it; not a prediction of any sale | APS 220, Federal Register of Legislation |
Figures read 25 September 2026. General information only; check the source before relying on any figure. The same logic applies to other trading sites with specialised improvements; car washes work the same way, with equipment and site use driving the valuation.
How do you read a service station listing before you make an offer?
Read a service station listing for five things a lender will ask about: what the price includes, the litres sold, the shop sales, the fuel arrangement and the lease. Listings are written to sell, so each headline figure needs its supporting evidence before it counts in a finance file, the same test a lender applies when financing any business purchase.
| Listing term | What it usually means | What a lender will want to see |
|---|---|---|
| Price plus SAV | Stock at valuation: the stock on hand is counted at settlement and paid for on top of the price | Cash for the stock on top of your contribution, because it usually sits outside the loan |
| WIWO | Walk in, walk out: the price is described as including stock and equipment | The contract schedule confirming what is included, before the lender values it |
| Freehold going concern or leasehold | Whether the land and buildings come with the business | The right loan type: property-secured for a freehold, trading-secured for a leasehold |
| Litres per day or per week | Fuel volume sold, often rounded or averaged by the agent | 24 months of litres by month from the site's own records, not the listing figure |
| Shop turnover | Convenience shop sales, before costs | Shop gross margin as well as sales, reconciled to card settlements and BAS |
| Commission site or agency | The fuel supplier owns the fuel and pays the operator a commission | Commission statements, the agreement's remaining term and the supplier's consent to transfer |
| Branded site | The site trades under a supplier's brand under a supply agreement | The agreement itself, its renewal terms and whether it passes to you |
| Lease with options, such as 5 plus 5 | An initial lease term followed by option periods at the tenant's election | The years left on the lease; lenders differ on how much weight they give option periods |
General descriptions only; the sale contract decides what is included. To compare a listing's daily litres with the Oil Code's 30,000 litres a month threshold, multiply by roughly 30; that threshold decides whether the Code's protections apply, and it is not a lending benchmark.
What is the difference between a freehold, going concern and leasehold service station?
The difference is what comes with the purchase: land and building, the land plus the trading business, the business alone on someone else's site, or an operator arrangement on a fuel company's site where you may own neither. That interest decides the loan. The general mechanics are set out in our guide to freehold going concern against leasehold; this section covers what changes when the site sells fuel.
What changes when you buy the freehold, with or without the business?
A freehold purchase gives the lender land and improvements to take as security, and a freehold going concern adds the trading business to the same contract. The valuer then decides how much of the value sits in the site and how much depends on the business continuing to trade, which is where what going concern means in a sale starts to matter to the loan. Whether the purchase is GST-free as a going concern depends on conditions set by the ATO for going concern sales; that belongs with your accountant, not the lender.
What if you are buying a service station leased to a fuel retailer?
A tenanted site bought as a passive investment is assessed on the lease, not your trading: the rent, the tenant's covenant and the years left on the lease. Lenders draw a line between owner occupied against investment commercial property, and a site leased to a fuel retailer sits on the investment side. The tank and contamination questions still reach the owner even when a national tenant runs the site, so the evidence in the tank section below still applies.
Can you finance a leasehold service station?
Yes, but there is no land for the lender to hold, so the loan is assessed as a business loan against the trading, the business assets and, typically, other security you offer. The leasehold interest and the supply agreement both need enough years left to cover the loan, and the lender will want the landlord's consent to the transfer.
What about running a site the fuel company controls?
On an operator or commission arrangement you may own neither the land nor the fuel. What you buy is the right to run the site and its shop, so the lender reads the agreement, the commission or operator income and how long both run. Our guide to buying a business with or without the property covers the wider trade-off.
What if you already run the site and want to buy it?
An operator buying the site or business they already run starts ahead, because the trading history is already in their name: the lender can read their own BAS, litres and margin rather than a vendor's figures. The lender still needs the supply agreement, the tank evidence and a valuation, and a supplier or landlord selling to its own operator may set conditions on the transfer.
Who owns the tanks, bowsers and canopy?
It depends on the deal, so check the equipment schedule and the lease before you sign. On a freehold the fixed plant usually goes with the land; on a branded or supplier-controlled site the supplier or landlord may own the tanks, pumps and lines and carry responsibility for them. Ownership decides what the lender can take as security and who pays when something needs repair or replacement.
| Interest bought | What the lender can take as security | Income the lender reads | What limits the loan term | Usual finance route |
|---|---|---|---|---|
| Freehold, owner-operated | Land and buildings, usually with fixed plant such as tanks, canopy and bowsers | The business's trading: fuel margin plus shop gross margin | The lender's own commercial property term, and the remaining term of the fuel supply agreement | Commercial property loan, sometimes with business funding for goodwill |
| Freehold leased to a fuel retailer (investment) | Land and buildings, subject to the lease | Rent under the lease and the tenant's covenant | Years left on the lease and the lender's investment policy | Commercial property investment loan |
| Freehold going concern | Land, buildings and the business together | Trading figures, with the valuer splitting site value from business value | Supply agreement term, and how much of the value depends on trading | Commercial property loan plus business funding for the trading component |
| Leasehold business | No land; business assets and, typically, other security offered | Trading figures, net of rent | Lease years remaining, landlord consent and the supply agreement term | Business loan, typically with other security |
| Operator on a supplier-controlled site | Little or no hard security from the site itself | Commission or operator income, plus the shop | The agreement's remaining term and whether it transfers to you | Business loan, often with other security |
General information only; how any one lender treats each interest varies by lender and by site.
How does the fuel supply agreement change what a lender will fund?
A lender reads the fuel supply agreement as the income contract: who owns the fuel, how you are paid, how long it runs and whether it transfers to you decide how much of the trading income it will count. A fuel supply agreement (the Oil Code calls most of them fuel re-selling agreements) is the contract under which a supplier provides fuel, and often its brand, to the site.
Are you a commission agent or a re-seller?
A commission agent sells fuel the supplier owns and is paid a commission set by the agreement; a re-seller buys the fuel and earns the margin between buying and selling it. The difference changes the income the lender reads: commission statements for an agent, margin statements for a re-seller. On an agency the fuel stock is not yours, so it is not an asset you can offer.
What does the Oil Code set for these agreements?
The Oil Code of Conduct is the mandatory industry code for fuel suppliers and retailers, enforced by the ACCC, with policy oversight by the federal energy department. It sets a minimum term, a renewal option on supplier-controlled sites, disclosure and cooling-off periods, and limits on when a supplier can refuse to renew. A commission agency agreement that meets every requirement of a fuel re-selling agreement except the requirement to pay a fee is still treated as one. This is not legal advice.
| Requirement | What the ACCC says | Why it matters to the loan |
|---|---|---|
| Minimum term | At least 5 years, subject to limited exceptions | Gives the lender a known income term to set the loan term against |
| Renewal option | Where the supplier owns or leases the site, an option to renew for at least a further 4 years, 9 in total | Renewal rights can support a longer loan term |
| When a shorter term is allowed | The site lease has less than 5 or 9 years left, the site owner plans to stop selling fuel or sell the site, or less than $20,000 is paid up front to the supplier | A short agreement can cap the loan term, so check which exception applies |
| Refusing renewal | A supplier must not refuse to renew unless it intends to use or lease the site for something other than selling fuel, or to dispose of the site | The lender may ask what the supplier plans for the site |
| Disclosure document | The supplier must give the Code and a disclosure document at least 14 days before the agreement is signed or non-refundable money is paid | Time for you, your solicitor and the lender to read the terms |
| Cooling-off | The retailer may end the agreement within 7 days of signing or paying money, whichever comes first | Line the finance conditions up with that window |
| Low-volume sites | The Code does not apply where the supplier reasonably believes the site will average less than 30,000 litres a month and gives written grounds at least 3 days before | A smaller site may not have the Code's term protections, so the agreement alone decides |
Source: ACCC, Fuel re-selling agreements, last updated 13 July 2026. Read 25 September 2026. The regulations that make up the Code are due to sunset on 1 April 2027, according to the Federal Register of Legislation entry for the Oil Code. A sunset date is not a repeal decision: the Department of Climate Change, Energy, the Environment and Water reports that an independent review of the Code by Ernst & Young found the Regulations should be remade, with recommendations that include changes to dispute resolution and closer alignment with the Franchising Code. Until a remade Code is published, check the register before you rely on these terms for a purchase settling near that date.
Why do term, renewal and assignment matter to the loan?
Lenders generally keep the loan term inside the income contract, so a short remaining term on the agreement can shorten the loan or become a condition of approval. Assignment matters because the agreement has to pass to you, usually with the supplier's consent. Have a solicitor read the fuel supply agreement, the lease and any environmental reports before you sign, and ask your accountant how the price is split between land, plant, stock and goodwill.
| Arrangement | Who owns the fuel in the tank | How you are paid | What the lender will want to see | Main risk to the lender |
|---|---|---|---|---|
| Commission agent on a supplier's site | The supplier | Commission set by the agreement, plus shop income | The agreement, commission statements, remaining term and the supplier's consent to transfer | The agreement ends or does not transfer, taking the fuel income with it |
| Branded fuel re-seller (your site or leased) | You, once bought from the supplier | Retail margin on fuel, plus shop income | The agreement, its term and renewal option, margin statements and supplier consent | Supply terms change or the agreement is not renewed |
| Independent unbranded supply | You | Retail margin on fuel, plus shop income | Supply contracts, litres history and margin statements | Security of supply and volatile volume or margin |
Sources: ACCC, Fuel re-selling agreements, last updated 13 July 2026. Read 25 September 2026. Table rows are general descriptions; the terms of your agreement decide.
A branded convenience franchise adds a franchise agreement on top of the fuel contract; our guide to how franchise loans work covers that layer. The business loan route is how most agency and operator purchases are financed.
How do lenders read service station trading figures?
Lenders assess a service station loan on margin, not turnover: fuel litres times cents per litre earned, plus shop sales times shop gross margin, reconciled to bank and card settlements. Fuel turnover is large and moves with pump prices, so it says little about what is left to repay a loan. Prepare the figures in this order.
- Litres by month for 24 months. Volume trend is the first thing a credit assessor reads.
- Fuel margin or commission statements. Cents per litre earned, or commission received, for the same months.
- Shop sales and shop gross margin. Kept separate from fuel so each can be assessed on its own.
- Merchant and card settlement reports reconciled to BAS. These tie the claimed sales to money received.
- Supplier rebates or support payments, shown separately. Lenders may discount income that the supplier can withdraw.
For context on fuel margins generally, the ACCC reports that the average gross indicative retail difference on petrol across the five largest cities was 17.9 cents per litre in the December quarter 2025. That figure covers retail operating costs and profits, so it is not net profit, it varies significantly by site and it is not an income estimate for any site (source: ACCC report on the Australian petroleum market, December quarter 2025, published March 2026).
Why do 2026 trading figures need explaining?
A temporary reduction in fuel tax of 32 cents per litre overall applied from 1 April to 30 June 2026, reducing to 16 cents per litre from 1 July to 2 August 2026; the ACCC notes the 32 cents included a 5.7 cent equivalent from states forgoing GST on fuel (source: ACCC release on the partly restored excise, 29 June 2026). That moved dollar fuel revenue with no change to the margin a site earned, so for these months a lender will want litres and margin, not revenue. This is a historical temporary measure, described here for reading trading figures, not tax advice.
How the trading converts into a value the lender will lend against is covered in how trading value is assessed and in our guide to what a lender advances on a going concern valuation.
How do you work out whether a petrol station is worth buying?
Start with the income the site actually keeps, not the headline fuel turnover: fuel litres multiplied by the cents-per-litre margin or commission, plus shop sales multiplied by the shop gross-margin percentage, then subtract rent, wages, power, merchant fees, insurance, maintenance and the other operating costs. After that, test whether the lease, fuel agreement, tanks, location and required capital spending support the price you are being asked to pay.
What is the quick formula for reading a service station listing?
Fuel gross margin = litres sold × cents per litre earned. Shop gross profit = shop sales × shop gross-margin percentage. Add any other recurring income separately, then subtract the recurring operating expenses. On a commission agency, replace fuel margin with the actual commission income shown in the supplier statements.
How do you normalise the seller's advertised net profit?
Rebuild the profit from source records rather than accepting the agent's add-backs at face value. Separate recurring income from one-off rebates, put a market wage back in for an owner who works in the business, test whether related-party rent is below market, reverse only genuine one-off expenses, and include recurring repairs, insurance, merchant fees, utilities and maintenance that a new owner will still pay. A lender and an accountant may treat the vendor's adjustments differently, so keep every add-back traceable to evidence.
| Test | What to calculate or verify | Why it matters to finance |
|---|---|---|
| Fuel economics | 24 months of litres and actual margin or commission, by month | Shows whether fuel income is stable enough to service debt |
| Shop economics | Shop sales, gross margin, product mix and merchant settlements | Separates high-turnover fuel from higher-margin convenience income |
| Rent and occupancy | Current rent, outgoings, annual increases, lease term and options | A high rent or short lease can reduce cash flow and cap the loan term |
| Labour | Actual roster and wages, plus the cost of replacing an owner who currently works unpaid or below market | Prevents an owner-operated profit figure being mistaken for a managed profit figure |
| Fuel agreement | Remaining term, renewal, pricing mechanics, minimum purchases, branding obligations and transfer consent | The agreement can control both the income and how long a lender is willing to lend |
| Tank and site position | Tank condition, leak records, environmental reports and regulator notices | A contamination or remediation issue can change the valuation or stop funding |
| Capital expenditure | Age and ownership of bowsers, tanks, canopy, refrigeration, POS, signage and EV charging equipment | Large near-term upgrades reduce the cash available for debt service |
| Location and future use | Traffic, access, nearby competition, planning controls and alternative uses of the site | These feed the valuer's view of demand and resale risk |
Do not rely on the listing's stated "net profit" without rebuilding it from the source records. Australian government guidance on buying an existing business recommends independently checking financial records, operations, legal documents, leases, agreements, licences, plant, inventory and liabilities before committing. How the rebuilt profit turns into lending value is covered in our guide to what a lender advances on a going concern valuation.
What tank and environmental evidence will a lender ask for?
Expect the lender or its valuer to ask for tank and line integrity results, leak monitoring records and an environmental site assessment, because underground tanks are regulated by each state and a leak can outrank the loan's security. An underground petroleum storage system (UPSS) is the tanks, pipework and monitoring equipment that store fuel below ground. When we package a service station file, this is the evidence we ask the vendor for first.
A file that moves
- A current tank and line integrity test
- Leak and fuel loss monitoring records
- An environmental site assessment, or a preliminary one
- Licences and approvals that transfer to the buyer
A file that stalls
- No tank records at all
- Tanks of unknown age or status
- Decommissioned tanks without validation
- A history of spills or regulator notices
| State or territory and topic | What the regulator publishes | What it means for your finance file |
|---|---|---|
| New South Wales: operating duties | The person responsible for a UPSS must have procedures to detect and fix leaks, documented in a Fuel System Operation Plan, and the regulation requires monitoring for fuel losses and groundwater monitoring wells, with exemptions set out in the Regulation | Ask the vendor for the Fuel System Operation Plan and the monitoring records; a lender or valuer will expect them to exist |
| New South Wales: leaks | Pollution incidents must be notified immediately, with a leak notification form within 30 days | Ask whether any leak has been notified and how it was closed out |
| Victoria | Anyone storing petroleum in a UPSS must meet the general environmental duty, assessing leak risks and eliminating or reducing them so far as reasonably practicable | Records of how that risk is managed are the evidence a lender or valuer can rely on |
| South Australia | Since 1 January 2020 every petrol station must hold an EPA licence, and its underground storage systems must meet the licence conditions; where no condition applies, the EPA recommends the relevant Australian Standards | Ask for the EPA licence and its conditions, and confirm how the licence will be held once you take over |
| Australian Capital Territory | Facilities designed to store more than 50,000 litres need an Environmental Authorisation; integrity test certificates are kept for the life of the system, and records pass to the new person responsible when the operator changes | Ask for the authorisation, the integrity test certificates and the site's management plan as part of the sale |
| Tasmania | There is no legal requirement to test tanks, soil or groundwater when a property is sold; the EPA recommends an environmental site assessment before purchase, and integrity testing on an operating service station | No legal test on sale does not mean no test for finance; lenders and valuers usually still want the evidence |
Sources: NSW EPA, Underground petroleum storage systems, updated 13 August 2025; EPA Victoria, Contamination from underground petroleum storage systems, updated 13 May 2025; EPA South Australia, Underground storage systems, last modified 30 March 2026; ACT EPA, Environmental Guidelines for Petroleum Storage in the ACT, June 2019; EPA Tasmania, Buying a property with underground fuel tanks, no update date shown. All read 25 September 2026. Each row applies to that state or territory only; in Queensland, Western Australia and the Northern Territory, check your environment regulator.
If something is found, the questions of who is liable and whether a clean-up charge ranks ahead of the mortgage are covered in our contamination guide. Where a bank will not proceed until testing is complete, a private lender will still look while testing is done, usually on a short term.
How much deposit do you need to buy a service station?
There is no single petrol-station deposit or LVR in Australia: the contribution is the gap between the price and what your lender will advance against the value it accepts. Freehold investment, freehold going concern, leasehold business and operator sites are different security types, so two buyers looking at the same asking price can need very different amounts of cash.
How should you plan for the deposit before you have a valuation?
Do not write your contract around a generic online LVR. Treat the contribution as unknown until a lender has assessed the structure and a valuation has been ordered, and keep extra cash aside for a valuation shortfall. Published online examples vary widely because they describe different lenders and deal structures rather than one market rule.
Why do petrol station LVR figures online vary so much?
Because the pages are often describing different transactions. A leased freehold investment, an owner-operated freehold going concern, a leasehold business and a purchase supported by extra residential or commercial property are not the same security. Some published figures are maximums subject to strong conditions, while others describe a narrower lender panel or a typical case. Compare the security type, valuation basis, borrower contribution and any extra property behind the percentage before treating two LVR claims as comparable.
Which value does the lending percentage apply to?
The percentage applies to the value the lender accepts, which can be below the price and can separate the property from the business. For a bank, APRA's prudential standard APS 220 requires it to assume a marketing period of up to 12 months when valuing property security, and up to 24 months for specialised or unusual properties where professional valuers advise this is appropriate (APS 220 on the Federal Register). That is a valuation assumption for authorised deposit-taking institutions, not a prediction of how long your site would take to sell; the detail is in our guide to why lenders lend less on specialised property.
Whether a site is valued as a going concern or with vacant possession can change the accepted value too; see going concern against vacant possession and how specialised security is valued.
What can lift the amount a lender will fund?
A supply agreement that comfortably covers the proposed loan term, clean tank and environmental evidence, reliable trading shown in litres and margin, a sustainable lease, relevant operating experience and additional acceptable security can all improve the structure a lender is willing to consider. If the valuation comes in under the price, the gap is yours to fund; our guide to a valuation shortfall at settlement explains the options.
What we see on service station files (indicative, from broking experience, as of September 2026; not a quote, an offer or an approval likelihood)
The things that most often stall a service station file in our experience:
- A supply agreement with less remaining term than the loan requested
- No tank integrity or leak monitoring history
- Trading evidence that shows fuel revenue but not litres and margin
- A buyer who budgeted for the deposit but not the stock, bonds, reports and working capital
Every lender and every site differs; this is not a prediction of your outcome.
How much cash do you need to buy a petrol station, beyond the deposit?
Your total cash requirement is the purchase contribution plus the costs the purchase loan does not cover: SAV, transfer duty on any land, legal and accounting costs, due diligence reports, lease or fuel bonds, agreement fees and working capital. This is why the cash needed to complete can be much larger than the number a buyer informally calls the "deposit".
| Cost | What it covers | How to plan for it |
|---|---|---|
| Contribution to the price | The gap between the price and what the lender advances on the value it accepts | Own funds or acceptable equity in other property |
| Stock at valuation (SAV) | Shop stock and, on a re-seller site, fuel on hand at settlement | Budget separately; the final stocktake can move the number |
| Transfer duty and legal costs | Duty on land where applicable and legal work on the sale, lease and fuel agreement | Own funds unless a lender expressly includes a cost |
| Due diligence reports | Valuation, tank and line testing, environmental work and accountant review | Often paid before unconditional approval or settlement |
| Lease and fuel bonds | Cash deposit or bank guarantee requested by a landlord or supplier | Confirm early: a bond can tie up cash even when it is refundable |
| Franchise, transfer or entry fees | Amounts payable under a franchise or supply arrangement where they apply | Read the agreements before finalising your funding plan |
| Working capital | Fuel deliveries, shop stock, wages, rent, utilities and a buffer after settlement | Own funds or a separate working-capital facility arranged before settlement |
Listings often quote the price plus SAV, and the lease or fuel agreement can add bonds or rent in advance, so build a cash-to-complete schedule rather than relying on the advertised price. The exact amounts belong in your contract, lease, supply agreement and final stocktake. Our guide to how a freehold going concern price is split and funded covers the components of the price itself.
What should you have in hand before you sign a service station contract?
Before you sign, collect the trading records, fuel agreement, lease, tank and environmental records, equipment schedule and approval position, then make the contract conditions long enough for the lender and your advisers to test them. The point is to discover a problem while you still have a contractual way to deal with it.
| Get or check | What to look for | What can go wrong if it is missing |
|---|---|---|
| Trading evidence | 24 months of litres, margin or commission, shop sales and GP, BAS, financials and merchant settlements | The lender cannot verify the income claimed in the listing |
| Fuel supply or agency agreement | Remaining term, renewal, pricing, minimum volumes, branding obligations and transfer consent | The fuel income may not transfer or may run for less time than the loan |
| Lease and options | Rent, outgoings, increases, years left, options, assignment conditions and responsibilities for plant | The loan term or business cash flow can be cut by the occupancy terms |
| Tank and environmental file | Integrity and leak records, monitoring plans, environmental assessments, spill history and regulator notices | Contamination or remediation can affect value, liability and lender appetite |
| Equipment schedule | Who owns the tanks, bowsers, canopy, signage, refrigeration, POS and other plant | You may assume an asset is included when it belongs to the supplier or landlord |
| PPSR and liabilities | Security interests affecting plant or other personal property being acquired | An asset may be subject to another party's security interest |
| Licences, planning and insurance | Environmental or dangerous-goods requirements, planning/use approvals, which licences transfer or must be re-applied for, and whether the insurer will cover the site and tanks on acceptable terms | You can settle but still be unable to operate lawfully or insure the risk on day one |
| SAV method | Who counts stock, the valuation basis, treatment of slow or obsolete stock and settlement timing | The cash required at settlement can move unexpectedly |
For a general business purchase, business.gov.au's due-diligence guidance says to review financial records, operations, legal documents, licences, leases, agreements, plant, inventory and liabilities. The same guidance suggests checking whether there are debts owing on business assets registered on the Personal Property Securities Register. Have your solicitor decide which searches and contract protections are appropriate to your transaction.
Which conditions should you discuss before signing?
- Finance approval by a realistic date. Allow enough time for the specialised valuation and any environmental or tank work the lender requires.
- Supplier consent. The fuel supply or agency agreement may need to be assigned or replaced before settlement.
- Landlord consent. Essential where you are taking over a lease.
- Satisfactory financial, legal and environmental due diligence. The drafting belongs with your solicitor and should match the actual risks being investigated.
- An agreed SAV process. Set out how stock is counted and valued at settlement.
If you are also entering a new fuel re-selling agreement, the Oil Code's disclosure and cooling-off periods can run beside the sale contract. Line the dates up with your solicitor rather than assuming the finance date, lease assignment and supplier approval will all finish together. To get a read on the file before you commit, you can check your eligibility first; it is not a lender's approval.
How long does petrol station finance take?
There is no reliable one-size-fits-all settlement time for a petrol station because the lender may need a specialised valuation, trading verification, tank or environmental evidence and supplier or landlord consents before it can settle. Set the contract's finance period around the actual work required for the site, not around a residential-loan assumption.
| Stage | What happens | What commonly holds it up |
|---|---|---|
| 1. First finance read | Broker or lender reviews the structure, asking price, lease/supply term and headline trading | Unclear ownership structure or missing listing evidence |
| 2. Full application | Borrower financials, vendor trading evidence and purchase documents are submitted | Missing BAS, financials, litres or margin statements |
| 3. Valuation and site review | The lender values the property or going concern and reviews the site's specialised risks | Valuer access, unusual security or a value below the contract price |
| 4. Environmental and tank work | Existing records are reviewed and extra testing or assessment is commissioned if required | Old tanks, missing leak records, contamination history or remediation questions |
| 5. Formal approval and conditions | The lender issues approval subject to any remaining documents or consents | Supply-term renewal, landlord consent or outstanding legal conditions |
| 6. Settlement preparation | Loan documents, supplier/landlord transfers, stocktake and cash-to-complete are finalised | SAV moving, bond requirements or a last-minute funding shortfall |
The practical rule is simple: start lender review before you become unconditional, and do not set a short finance date until the valuation, environmental work and third-party consents have been scoped. If the seller insists on a tight date, have your solicitor explain what happens if those items are not finished in time. If the valuation lands below the price, our guide to a valuation shortfall at settlement sets out the options.
What happens if the valuation, finance approval or supplier consent is not ready by the finance date?
Do not assume the contract automatically extends. The outcome depends on the wording your solicitor negotiated: you may need an agreed extension, the finance condition may expire, or you may lose a contractual right that depended on satisfying the condition by that date. The same applies to landlord or supplier consent and environmental due diligence. Ask for an extension before the deadline where appropriate and get legal advice on the consequences of becoming unconditional while a critical approval is still outstanding.
Which lenders finance petrol stations in Australia, and why will some say no?
Major banks, specialist commercial lenders, non-banks and private lenders can all appear in a petrol-station transaction, but they do not accept the same security, environmental position, lease or supply term, valuation method or borrower profile. A decline only tells you something useful once you know whether the problem is policy, value, cash flow, contamination, agreement term or the borrower's own position.
Why might a lender say no?
Common reasons include specialised-security policy, an unacceptable valuation, contamination or missing tank evidence, a short remaining lease or supply term, weak debt service after normalising the expenses, or a purchase price that depends too heavily on goodwill. Those are different problems and they need different fixes.
Do electric vehicles change how a lender sees the site?
They can, through the valuer's view of future fuel demand, capital expenditure and alternative use, but EV adoption does not create a blanket rule that service stations are unfinanceable. A strong location with convenience retail, food, car wash, parcel or charging income can read differently from a site whose value depends almost entirely on fuel volume.
What should you do after a decline?
- Get the actual reason. A policy decline, valuation shortfall and cash-flow decline are not interchangeable.
- Fix what is fixable. That may mean tank testing, a supply agreement extension, restated trading, more equity or a lower purchase price.
- Match the structure to the lender. A non-bank or specialist lender may assess a security type a major bank will not.
- Use short-term funding only where the exit is clear. Private lending can solve a timing or policy gap, but it does not turn a permanently weak purchase into a good long-term loan; our guide to how private lending works explains the exit it needs.
For other specialised assets and commercial property lending, start from the property lending hub or the business owners finance hub.
What finance do you need after you buy a petrol station?
After settlement the finance questions shift to three things: working capital for fuel deliveries and stock, equipment finance for plant that wears out or needs upgrading, and, if you bought on short-term funding, a refinance onto a longer loan. Planning these before settlement is cheaper than solving them after.
How do you pay for fuel deliveries and stock?
On a re-seller site you pay for fuel on the supplier's terms, and a delivery can be one of the largest regular payments the business makes, so plan working capital before settlement rather than after. A business line of credit or overdraft is the usual tool for that timing gap; on a commission site the supplier owns the fuel, so the pressure falls on shop stock and wages instead.
What should the first 6 to 12 months of working capital cover?
Model the timing of supplier payments, shop-stock replenishment, wages, rent and scheduled rent increases, electricity, merchant settlements, insurance, tax obligations, repairs and a contingency for plant failure. A profitable site can still run short of cash if fuel or stock has to be paid before customer receipts and card settlements have fully recycled. Build the buffer from the site's actual payment terms and monthly cash cycle rather than using a generic percentage of the purchase price.
Can you finance new bowsers, fridges or EV chargers?
Yes, plant and equipment you own is commonly funded separately from the purchase loan, often by chattel mortgage. Check the supply agreement and lease first: on a branded site, changes to pumps, canopy or signage may need the supplier's approval, and equipment the supplier owns is not yours to finance.
What if the lease or fuel supply agreement expires before the loan does?
That mismatch is a problem the lender usually tries to solve before approval, not after settlement. It may shorten the loan term, require a lease option or supply renewal to be exercised, or make the extension or replacement agreement a condition of settlement. If the agreement later approaches expiry without a replacement, refinancing can become harder because the lender no longer has the same contracted income horizon.
When can you refinance a service station loan?
Once you have trading in your own name and the issues that shaped the first loan are resolved, such as tank testing or a supply agreement renewal, other lenders can assess the file again, including a move from short-term private funding to a longer business loan. Private funding needs that exit planned from the day it starts.
Buying a petrol station with finance comes down to five connected tests: what interest you are buying, whether the litres and margin produce sustainable cash flow, whether the lease and fuel agreement run long enough, whether the tanks and environmental file are acceptable, and how the lender values the specialised security. The total cash required is usually larger than the purchase contribution because SAV, bonds, reports, duty and working capital can sit outside the loan.
If a lender says no, get the reason before changing lenders: a policy mismatch may be routable, while a valuation, contamination, cash-flow or agreement problem usually has to be fixed, repriced or funded differently.
Key takeaway: reverse-engineer the listing before you sign (litres × margin, plus shop sales × GP, minus real operating costs), then line up the lease, fuel agreement, tank evidence, valuation and cash-to-complete around that result.Frequently Asked Questions
Yes: lenders fund petrol station purchases as a commercial property loan, a business loan or both, depending on whether you are buying the land, the business or the two together. The loan is then shaped by the fuel supply agreement, the tank evidence and trading figures shown as litres and margin.
There is no single petrol-station deposit or LVR. Your contribution is the gap between the purchase price and what the lender will advance against the value it accepts; if the valuation is below the price, your cash contribution rises. SAV, bonds, duty, legal and due-diligence costs and working capital can sit on top of that amount.
SAV means stock at valuation: the fuel and shop stock on hand at settlement is counted and paid for on top of the business price. It usually needs to come from your own funds or working capital rather than the purchase loan, so budget for it separately. On a commission agency the supplier owns the fuel, so SAV covers shop stock only.
Often yes, as a business purchase, but because the fuel supplier owns the fuel and pays you commission, the lender assesses the commission income and the agreement's remaining term, not fuel sales. The supplier's consent to the transfer is usually a condition.
Under the Oil Code a fuel re-selling agreement must run at least 5 years, with an option to renew to 9 years in total where the supplier owns or leases the site, subject to limited exceptions. The Code does not apply where the supplier reasonably expects the site to sell less than 30,000 litres a month and gives written grounds. Its regulations are due to sunset on 1 April 2027 and a government review found they should be remade, so check the current position and have a solicitor read the agreement.
Fuel margin: lenders read litres sold and cents per litre earned, because fuel revenue moves with pump prices and excise while the margin is what services the loan. Shop sales and shop gross margin are assessed separately.
Not always by law: Tasmania, for example, has no legal requirement to test on sale, while South Australia requires every petrol station to hold an EPA licence. Lenders and valuers usually want tank integrity results and a site assessment before they fund, and each state and territory sets its own rules for tank operators, so check with your environment regulator.
No law requires it, but lenders assess who will run the site, so expect questions about your experience in fuel, convenience retail or a similar business and who will manage it day to day. A buyer without that background can strengthen the file with an experienced manager, any induction program the supplier offers, or additional security.
Yes, you can offer your home or another property as additional security, which matters most on a leasehold or operator site where there is no land for the lender to hold. That property is at risk if the loan is not repaid, so understand the terms first; a second mortgage is one way to use equity while keeping your existing home loan.
Usually because of the specialised security, contamination risk or a short remaining fuel supply term, not because service stations are unlendable; other lenders may still assess the same file. A private lending facility can cover the gap while the issue is fixed.
Because the figures often describe different security types and lender policies. A leased freehold investment, freehold going concern, leasehold business and a purchase supported by extra property are not directly comparable, and a published maximum is not the same as what a lender will offer on your valuation and borrower position. Compare what sits behind the percentage before using it to set your deposit.
There is no single price: it depends on whether you buy the land, the business or both. On top of the price, budget for stock at valuation, transfer duty on any land, legal costs, due diligence reports such as tank testing, any bond or guarantee the landlord or supplier asks for, and working capital. A lender funds a share of the value it accepts, not the price.
FBAA Accredited
