A service station owner can refinance the loan on the land, tanks and canopy, the equipment loan on the forecourt, the shop fit-out and the line that pays for fuel deliveries, together or one at a time. The five debts are set out together first, then each loan in turn and the records a fuel site keeps. This guide quotes no loan-to-value ratio for a service station. That ratio is the loan written as a percentage of the property's value.
Is the loan on the site coming up for its annual review, with the lender asking for fresh tank test results? Are the dispensers on a loan with four years to run while the pay-at-pump readers already need replacing? Have the fuel deliveries and the shop fridges left you paying four loans and an ATO payment plan each month?
The retail margin on fuel is counted in cents a litre. In 2024-25 the ACCC's petrol monitoring put the annual average gross indicative retail difference for petrol at 15.9 cents a litre across the five largest cities, against an average pump price of 180.1 cents. The ACCC treats that difference as a broad indicator of gross retail margins, covering operating costs and profit.
Ardent Capital Group is here to help with refinancing the loans on your forecourt and in your shop, starting from whichever one is pressing hardest.
What a freehold service station is repaying
Owning the site you trade from, the freehold, means your debts cover the land and tanks as well as the equipment on the forecourt. A freehold service station runs two trades on one title. The forecourt sells fuel in volume at a margin of cents a litre. The shop sells drinks, food, coffee and groceries at margins set line by line. The loans follow that split: a large one on the property, smaller ones on each side's equipment.
The land, buildings, underground tanks and lines and the canopy are valued together as one site. The mortgage over the land covers all of them. Dispensers, tank gauges, pay-at-pump readers and forecourt controllers can be financed separately as equipment. So can the shop's cabinets and coffee machines.
Fuel deliveries are paid for before most of the fuel is sold. So a revolving stock finance facility or overdraft can sit beside the loans, a limit drawn, repaid and drawn again. Your home loan, vehicle finance and any cards carrying site costs belong on the list too, since together they make up everything you repay.
Example: a freehold service station's five debts
Side by side, the debts show which repayment presses hardest on the forecourt's cash. These figures are illustrative, built around loans we can assist with, to show how the repayments move under each option. The owner holds the freehold and trades through an operating company. Each rate in it is assumed for the sums only.
Each debt has its own monthly payment, and its remaining term shows when that payment stops. The stock finance is interest only: each payment meets the interest, and the balance stays put.
| Loan | Balance | Rate | Remaining term | Monthly payment |
|---|---|---|---|---|
| On the land, tanks and canopy | $1.9M | 7.5% (assumed) | 216 months | $16,054 |
| On the dispensers, tank gauges and pay-at-pump readers | $240k | 10% (assumed) | 48 months | $6,087 |
| On the shop's fridges, coffee machine and hot food display | $80k | 12% (assumed) | 30 months | $3,100 |
| Stock finance for fuel deliveries and shop stock | $120k drawn | 9% (assumed), interest only | Revolving | $900 interest |
| ATO payment plan | $48k | Any interest charge left out | 12 months | $4,000 |
| All five | $2,388k | $30,141 |
The site owes $240k on its dispensers, gauges and readers, at an assumed 10%, and pays $6,087 a month for 48 more months. In all, $30,141 goes out each month. The ATO plan finishes after 12 months, the loan on the shop's equipment after 30 and the loan on the dispensers after 48. The loan on the site runs another 18 years.
How a refinance changes a fuel site's loans
A refinance pays out a loan with a new loan on different terms. Whether it sits on the tanks or the coffee machine, three things can change.
- Rate. Keep the months as they are and drop the rate, and the site pays less each month and less in total. The lender sets the rate after assessment and approval.
- Months. Spreading a balance over more months shrinks each payment and adds interest, since the money stays borrowed longer. It can still suit a site whose forecourt closes for a tank replacement.
- What the lender holds. Security is what a lender can turn to if the payments stop. Lenders generally price loans over property below equipment and unsecured loans. Putting the loan on the dispensers into the property loan ties the land to equipment that will be replaced long before the mortgage ends.
Worked example: the property loan's first year
Splitting one payment on the property loan in two shows how slowly a large property debt falls at first. The month's interest is paid first, and the rest reduces the balance. On $1.9M at an assumed 7.5%, interest in month one comes to $11,875, so $4,179 of the $16,054 payment reduces the debt. Across the first 12 months, about $141k goes to interest and about $52k comes off the balance. Interest is charged on a falling balance, so its share of each payment shrinks every month.
Refinancing each loan on the forecourt and in the shop
The loans on the site, the equipment and the shop each funded things that wear out at very different rates, from tanks under the driveway to the pie warmer on the counter.
The loan on the land, tanks and canopy
In the example, the loan on the land is the largest debt, and it is where a fuel site differs from an ordinary shop or office. Some lenders list service stations among the properties they will not take as security. How much can be borrowed depends on the lender and on the site's valuation.
Refinanced, the property loan can sit with a new lender at a new rate over a new term. The mix of interest only and principal and interest, which pays the balance down, can change too. Where the site has grown in value, it can release equity: the gap between what the site is worth and what is owed. Our page on refinancing a service station you own sets out the property loan, the tank record and equity release.
A branded site sells fuel under a supplier's name. There, the fuel supply agreement records which entity signed it, how long it runs, and whether it passes to a buyer. The Oil Code is the mandatory industry code governing dealings between fuel suppliers, distributors and retailers. A fuel re-selling agreement is the agreement under which a supplier lets a retailer run a fuel business under the supplier's brand and system. Under the Code, one made since 1 March 2007 must generally run for at least five years, with some exceptions. An independent site sells fuel under its own name, and its supply contracts and invoices show how, and from whom, it buys fuel.
Contamination and the tank record
The tanks and lines are buried, so the record kept about them is what shows their condition. Underground fuel tanks fall under each state's environment protection rules. In NSW, the EPA states that these systems can leak and contaminate land and groundwater. The person responsible must record how leaks are detected and fixed in a Fuel System Operation Plan. And from 1 September 2019, most NSW sites are regulated by local councils.
Some lenders exclude contaminated land from the security they take, so the tank record goes in with the application. It covers integrity test results, showing whether tanks and lines hold fuel without leaking, and loss monitoring, which compares fuel delivered and sold with what is in the tanks. It also covers groundwater well results where required, any leak notification and how it was closed out, and any environmental site assessment, a consultant's report on the land. Where tanks were decommissioned, or taken out of service, and the land validated, those records form part of the site's history too.
Dispensers, tank gauges and pay-at-pump readers
The tanks, piping and forecourt equipment each wear out at their own pace. Effective life is the number of years an asset can be used to produce income, taken from the ATO's determination or worked out by the business. It is a tax figure, not a promise of how long the equipment will run. In the effective life table the Commissioner of Taxation sets for fuel retailing, underground storage tanks and underground piping are 20 years. Dispensers and automatic tank gauges are 10, pumps 7, and pay-at-pump readers and forecourt controllers 6. They are depreciation lives, not lender rules.
Refinancing the loan on the dispensers can change its rate, its months, its lender and the size of any balloon. An equipment loan runs down to nil by the end of the term, unless it ends in a balloon, a lump sum left to the final repayment. A refinance cannot extend how long a card reader works. When the dispensers are due for replacement, the payout and the new equipment can be funded together, so only one loan sits on the forecourt, sized to the supplier's quote.
The shop: fridges, coffee and hot food
The shop is the second trade under the canopy, and its loan paid for the equipment that sells drinks, coffee and hot food. It pays for refrigerated cabinets, shelving, counters, coffee machines, pie warmers, CCTV and the point-of-sale system. The same table puts refrigerated cabinets and hot food displays at 10 years, coffee machines at 5 and CCTV at 4.
Loans on the shop's equipment can be secured over the equipment itself or by a general security agreement, which is a charge over business assets. The charge sits on the PPSR, the national register of security interests in personal property. It does not cover land, buildings or fixtures to land. A coffee machine with a 5-year effective life, financed over seven years, can be replaced while its loan is still running.
Fuel stock, the overdraft and the ATO
Fuel has to be in the tanks before a litre can be sold, so the site pays for each load before most of it is sold. A revolving stock finance facility covers the gap and the shop's stock, rising and falling with each load. Turned into a term loan, the drawn balance moves into that loan, and the limit goes with it, along with the room the next fuel delivery would have used.
An ATO payment plan is a debt to the tax office, not to a lender. It can be paid out from a new business loan or from refinancing the site, where a lender will consider that. The site's loan interest may be tax deductible. Since 1 July 2025, the ATO's general interest charge on late tax is no longer deductible. Your accountant confirms how that applies to you.
If a fuel supplier or a landlord owns the site
Not every operator owns the ground under the pumps. An operator leasing the site refinances the equipment, the shop, the stock finance and any ATO plan, with no property to offer. The lease and the fuel re-selling agreement each have an end date. The earlier of the two is when the current arrangement on the site next comes up for renewal. Our business loans cover equipment, working capital and consolidation for a trading business.
Putting the service station's loans together
The forecourt, shop and site debts can then be weighed as one set.
Worked example: the same $2.27M, handled four ways
Four arrangements of the same debts show that the smallest payment this year does not bring the smallest total over the years. The stock finance stays its own limit under all four and sits outside these sums. That is why leaving the loans as they are costs $29,241 a month here, not $30,141. Each option is measured against that, by this year's monthly change and by the cost or saving by the end of the debt.
| Option | Paid each month | Monthly change | Repaid over the full term | Difference over the term |
|---|---|---|---|---|
| Leave the three loans and the ATO plan as they are Today | $29,241 | Starting point | $3,901k | Starting point |
| Shift the property loan to a lower rate over the same 216 months | $28,571 | $670 less | $3,756k | $145k less |
| Add the two equipment loans and the ATO plan to the property loan | $19,164 | $10,077 less | $4,139k | $238k more |
| Put the two equipment loans and the ATO plan into one 5-year loan, keep the property loan | $23,783 | $5,458 less | $3,931k | $30k more |
Illustrative and rounded. The rates are assumed to make the sums work and are neither current rates nor quotes. The stock finance stays a separate revolving limit in all four options and sits outside these totals, as do valuation, legal and payout costs, any break cost and any ATO interest charge. A break cost is a fee for ending a fixed rate early. The more rates have fallen since the rate was fixed, the bigger it is.
Adding the two equipment loans and the ATO plan to the property loan gives the lowest monthly payment, $10,077 less than today. It also gives the highest total, about $238k more than leaving the loans alone. The dispensers inside it have a 10-year effective life but would be repaid over 18 years.
Repricing only the property loan saves about $145k without stretching anything. The 5-year combined loan cuts this year's payments by $5,458 a month. From month 31, the point where the shop's equipment would have been paid off, it costs more each month, and it adds about $30k overall.
Adding debt to the property loan also needs the valuation to carry it, which each lender decides for itself. Our approach would be to obtain a payout figure for every loan. That is the exact amount that clears it on a chosen date. We would then weigh the options on monthly payment and total repaid. Your chosen option then goes to lenders willing to look at fuel sites. No lender has quoted or approved any of these numbers.
What secures the new loans
The site, its equipment, the business and possibly your home can each secure the new loans.
- The site. A mortgage over the land covers the tanks, lines and canopy. Moving it means a fresh valuation, and the incoming lender registers its own mortgage as the old one comes off the title.
- The equipment. When the loan on the dispensers or the shop's equipment is paid out, the outgoing lender's claim over that equipment ends, and the incoming lender registers a fresh one.
- A general security agreement. It helps to confirm that each outgoing lender's PPSR registration is lifted at payout.
- Your home. If the home already secures part of the site's debt, the home can come off as security once the site's trading supports the loans by itself. Pledging the home can bring a lower rate than an unsecured business loan, though the home then becomes security for the site's debts, so the choice stays with you. For the home loan, see our home loans for business owners.
The land in one entity, the trade in another
A fuel site's freehold and its trade are sometimes held apart. Where a trust or company owns the land and an operating company runs the forecourt and shop, the rent paid between them appears in each entity's accounts, beside the trading. The application also sets out which entity signed the supply agreement, which holds the tank records, and which directors and trustees will guarantee the loans. For a second site, our service station property loans cover the purchase.
Before you apply to refinance the site
Three things on a fuel site's calendar bear on timing: a loan review, a fixed rate's end, and tax lodgements.
- A review or expiry date ahead. Starting well ahead gives room, since a valuation and any environmental report take time to order and read. The property loan on a fuel site can also carry an annual review, where the lender looks at recent trading and the site's environmental records. Planning a refinance and preparing for a review use much the same paperwork. Our guide explains what to expect.
- A fixed rate with time left. Refinancing now can attract a break cost. Having it in writing lets it be weighed against the saving.
- BAS or returns outstanding. A BAS is the business activity statement each business sends the ATO. Lodging any late BAS or return first is a useful step, and it brings the site's ATO account up to date.
Litres, fuel margin and shop sales
A service station's dollar takings swing with the pump price even when the same cars pull in. The forecourt and the shop are two income lines, and the point-of-sale system records each. Monthly litres and the margin in cents a litre move less than dollar sales, because fuel turnover follows pump prices. The shop's records show sales and gross profit by category. Gross profit is what is left from sales after the cost of the stock.
Wages are the other large cost, with minimum pay and conditions set by an award. Driveway attendants, console operators and roadhouse attendants are covered by the Vehicle Repair, Services and Retail Award, which carries special provisions for those three roles. A site trading long hours rosters staff every day of the week.
Documents to gather
Much of this paperwork already exists, in the point-of-sale system, the tank records, the supply agreement and the accountant's files.
- Payout figures in writing on the site, the equipment and the stock finance, and where the site has an ATO plan, the statement of account for it
- Statements for each business bank account
- This year's BAS, and accounts for the last two years each entity has lodged
- Monthly litres by grade and shop sales by category from the point-of-sale system
- The fuel supply agreement, or the lease and fuel re-selling agreement if you lease the site
- The Fuel System Operation Plan, tank test results, monitoring records and environmental reports
- Equipment invoices with purchase dates
- Personal debt statements (home loan, car finance, credit cards) for each owner and guarantor
Questions owners ask about refinancing a fuel site
The tanks went in around 25 years ago. Can the site still be refinanced?
A lender can consider it. The integrity testing, the monitoring records and any replacement plan show the tanks' condition. The 20-year figure in the tax table is a depreciation life, not a lender cut-off.
We reported a leak years ago and it was cleaned up. Will a lender hold that against us?
That depends on the lender and the documents. The notification, the investigation and the report confirming the close-out show what happened and how it was resolved. Together they form part of the site's history.
Pump prices fell and our turnover dropped. Will that look like the business shrank?
Not necessarily. If the litres held up, it helps to give the lender monthly litres and the cents-a-litre margin beside the dollar figures. Those figures show the fall as a price movement.
Tobacco sales have dropped in our shop. Does that hurt the refinance?
Not necessarily. Where tobacco carried a thin margin, losing it cuts turnover by more than profit. The shop's sales and gross profit by category show which.
Can I move the loan on the dispensers and keep the property loan with its current lender?
You can. Moving only the equipment loan needs no new valuation of the site. It helps to check its payout figure first, because the months left decide how much interest there is to save.
Could equity in the site fund a car wash or a new shop?
It can, where the valuation supports it and subject to the lender. Released equity is assessed on its purpose, so the builder's quote, the plans and any council approval go in with the application.
Will a lender want a new environmental report?
Sometimes. A lender or valuer may ask for a preliminary site investigation, a first look at the land's history and condition. A detailed one follows only if the first raises a question. We tell you before one is ordered.
What does refinancing cost before any saving shows up?
A site valuation, legal and settlement fees, any establishment fee, discharge fees and break costs on a fixed rate. Equipment loans can add early payout charges, which some contracts apply when paid out before their end date. Adding them up lets the sum be set against the change in monthly payments and total repaid.
Will talking to several lenders mark my credit report?
A formal application does. It shows on the company's report and each director's. Going only to lenders that consider fuel sites keeps the list short.
My fuel supply agreement renews before the property loan ends. Does that matter?
It can on a branded site, subject to the lender. The renewal terms and any option to renew show whether the agreement will run as long as the loan. Your solicitor confirms what the agreement says.
Talk to us about the loans on your service station
Refinancing a service station's loans means fitting each one to the life left in the tanks, dispensers and canopy it paid for, to the site's valuation, and to the litres and shop sales paying it down. At Ardent Capital Group we assist service station owners with site refinancing, equity release, equipment and fit-out loans and working capital. The Ardent Capital Group team can arrange the finance across the site and the operating company, and your accountant settles the tax side. If a refinance of your service station is on your mind, we would be pleased to work through your loans together.
