Can you get a conventional bank loan on a gas station?

Yes. While most banks avoid gas stations because of environmental risk and single-use collateral, a specific set of relationship banks lends on them conventionally, without SBA, at 55% to 65% LTV. This Campbell, California closing was a conventional bank loan at 60% loan-to-value, no SBA guarantee involved.

What interest rate do gas station loans carry?

Expect a premium over generic commercial real estate. This 2025 closing priced at 6.85% fixed for the first five years, converting to Wall Street Journal Prime + 0.75% for the final two years of a 7-year term, with a 25-year amortization and a 0.5% fee.

What is a Phase I environmental report and why does it matter for gas stations?

A Phase I Environmental Site Assessment reviews the property's history and current condition for contamination risk. On a gas station, underground storage tanks make it the single most important diligence item; a clean Phase I is what allows a conventional lender to move forward without requiring soil testing or declining outright.

What is a global debt service coverage ratio?

Global DSCR looks at all of the guarantors' income and all of their debt obligations across every property and business they own, not just the subject property. This lender required 1.20x coverage on the property itself and 1.00x globally, meaning the borrowers' whole financial picture had to carry its combined obligations.

Do banks require the operating account to move for a gas station loan?

Relationship banks frequently require the main operating account for the life of the loan, as this lender did. It is a real cost worth weighing, but it is also part of why relationship banks will hold gas station collateral on their balance sheet at conventional pricing at all.

Case Study: $1.94M Gas Station Refinance in Silicon Valley at 6.85% Fixed

Deal at a Glance

Loan Amount	$1,940,000
Property	Branded gas station (owner-operated)
Location	Campbell, California (San Jose / Silicon Valley)
Transaction	Refinance (payoff of the incumbent bank)
Lender Type	Los Angeles-based relationship bank, conventional (no SBA)
Rate	6.85% fixed years 1-5, then WSJ Prime + 0.75% years 6-7
Term / Amortization	7 years / 25-year amortization
Leverage	60% of appraised value
DSCR	1.20x property, 1.00x global
Prepayment	5-4-3-2-1 declining
Fee	0.5%
Closed	Note signed September 19, 2025; deed of trust recorded October 3, 2025

The Deal That Walked in the Door

We are Commercial Lending Solutions, a commercial mortgage brokerage based in Los Angeles, California (CA), and this deal is proof that the hardest property types are where a broker earns the fee. The client: a father-and-son ownership group in the South Bay who own and operate a branded gas station on a major commercial boulevard in Campbell, California, a dense, affluent trade area on the edge of San Jose in the heart of Silicon Valley. They needed to refinance the existing bank debt on the station, and the eventual takeout came from a conventional relationship bank willing to hold the collateral without an SBA guarantee.

Commercial Lending Solutions specializes in special-purpose property refinancing, including gas stations and other single-use collateral, for owners across California and nationwide, and this Campbell assignment sat right in that niche.

Say the words "gas station" to most bank credit officers and the meeting is over. Underground storage tanks mean environmental tail risk. The building is single-purpose. The real estate value and the business value are tangled together. The usual answer borrowers get is either an SBA loan with all its paperwork and guarantee fees, or a polite decline. Our clients wanted neither. They wanted conventional bank debt at a fair rate, and their operating history earned it.

What Made It Hard

The collateral type itself. Gas stations sit on almost every bank's prohibited or restricted list. The lender pool for conventional, non-SBA gas station loans is small and specific.
Environmental diligence is make-or-break. One bad line in a Phase I report about the tanks and the deal dies. We commissioned the Phase I early so the answer arrived on our schedule, not the lender's.
Global cash flow underwriting. The winning bank underwrote not just the station but the guarantors' entire portfolio, requiring 1.20x coverage on the property and 1.00x coverage globally, across everything the family owned and owed.
A long runway. The first bank's letter of interest arrived in February 2025. The deal did not sign a note until September 19. Keeping a deal alive and competitive for seven months is its own discipline.

How We Ran the Process

Trevor Damyan, a California-licensed real estate broker (DRE #02244836), placed this loan knowing the banks that actually want gas station collateral in California are, for the most part, the Los Angeles-based relationship banks with deep experience lending to owner-operators, and that is exactly where we took it. Two of them competed for this loan through the spring and summer of 2025. The first issued a letter of interest in late February. The second came in during June with a sharper structure, and improved it again as we pushed the two against each other. The June proposal won:

$1,940,000, capped at 60% of appraised value, conventional, on the bank's balance sheet, no SBA guarantee, no SBA fees
6.85% fixed for the first five years, converting to WSJ Prime + 0.75% for years six and seven, a structure that gave the owners a long fixed window without paying for a full 7-year lock
7-year term on a 25-year amortization, with a 0.5% loan fee and a $5,000 good faith deposit credited at closing
5-4-3-2-1 declining prepayment, fully open in the final two years
Relationship terms: the station's main operating account moved to the bank for the life of the loan, which is a real requirement, and also the reason a bank will hold this collateral at this pricing

The Phase I environmental came back clean, the incumbent bank's payoff demand was ordered in August, the note signed September 19, 2025, and the deed of trust recorded October 3. The old loan was paid off in full.

"Gas stations are a list business, not a creativity business. You either know the fifteen banks that will actually book underground storage tanks conventionally, or you send the borrower into an SBA process they never needed."
, Trevor Damyan, Commercial Lending Solutions

Why We Won This One

Gas station financing is a list business. There is no clever structure that makes a bank want underground storage tanks; there is only knowing which fifteen banks in the country actually book this collateral conventionally, and having credibility with them. Being based in Los Angeles, where most of those banks are headquartered, we deal with them constantly. The property was 340 miles north of our office and it did not matter; the lender relationships were down the street.

The second thing that won this deal was sequencing the environmental work. We treated the Phase I as the gating item from day one, not a closing formality. When a lender asks "what about the tanks?" the winning answer is a finished report in the data room, not a promise to order one. Every week an environmental question sits unanswered, the credit officer's imagination gets worse.

And the competition mattered. February's letter of interest became June's better structure became September's closing precisely because neither bank ever believed it was the only one at the table. On a property type where borrowers are used to taking whatever they can get, our clients picked from two real offers.

Is This Structure Right for Your Deal?

If you own a gas station, car wash, or another special-purpose property and you have been told SBA is your only option, it usually is not. We arrange owner-occupied commercial loans, when they genuinely fit, and specialty financing from a network of more than 1,000 capital sources, including the relationship banks that quietly book gas station loans all year.

Apply for refinancing or call us at 310.708.0690 to talk through your property.

This is one of 46 closings we have arranged across California from our Los Angeles office. See our California commercial financing page, or browse all California closed deals.

Trevor Damyan

Commercial Mortgage Broker, Commercial Lending Solutions | CA DRE 02244836

Trevor Damyan is a commercial mortgage broker at Commercial Lending Solutions with a background in structured finance at CBRE and Marcus and Millichap Capital Corporation. He specializes in bridge loans, construction financing, SBA programs, DSCR loans, and complex capital structures for investors and developers across all 50 states.

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