Gas Station and Convenience Store Feasibility Study, Lockhart, Texas: An SBA 7(a) Worked Case

The subject is hypothetical: a new branded fuel and convenience store with a made-to-order kitchen, on about two acres of commercial land on Lockhart's US 183 corridor. Every market figure is public and dated. Every model figure below is computed by the case engine from the inputs listed further down, each of which carries either a source or the word assumption.

Fuel demand starts with vehicles and the trips they make. Lockhart's demand base has three parts: a resident population growing faster than the state, a commuting workforce that drives out of town each day, and a visitor calendar built on barbecue, a state park and a June festival. The table sets out what the public record shows for each, with its date.

Growth that arrives by moving van

The Caldwell County gain is mostly migration [2], and that matters for a fuel store. New households arrive with vehicles and with jobs elsewhere. Lockhart residents average a 28.6-minute trip to work [1], long enough that most commuters leave town on SH 130 toward Austin or on SH 142 toward San Marcos and I-35 [3]. A commuter fills where the trip begins or ends. A store on US 183 inside town sits on the home end of those trips, which is the steadier end: it does not depend on a toll road's through-traffic choosing to exit.

The national trend runs the other way. EIA reports that U.S. gasoline use fell 1% in 2025, to 8.9 million barrels a day, and expects it to keep declining in 2026 and 2027 as fleet fuel economy improves [10]. A typical vehicle used 457 gallons in 2025 and came to a station 54.4 times [9]. In a flat or shrinking national pool, a site's volume grows only if its local vehicle count grows. Lockhart's does, which is the strongest single argument for this store. Our note on gas station demand per capita explains why the per-vehicle decline still leaves room for a well-placed store in a growing town.

A county seat that sells to the county

Lockhart's retail sales of $319,643,000 in 2022 came to $21,412 per resident [1], the profile of a county seat that draws shoppers from the surrounding county. Its largest employers, as the economic development corporation lists them, are the school district, Walmart and H-E-B [4]; the corporation gives no date for its headcounts, so the study uses none of them, and daytime employment becomes a lender condition. Household income is middle-market: a median of $68,400 and a per capita figure of $30,208 [1]. A store selling to this base sells everyday baskets, fountain drinks and fast food, not destination grocery.

Visitors on a calendar, not a curve

The Texas Legislature named Lockhart the Barbecue Capital of Texas in 1999 [6], and the town's visitor draw follows that reputation. The 2026 Texas Monthly BBQ Fest brings more than 35 of the magazine's Top 50 barbecue joints downtown on November 7 and 8 [5]. The Chisholm Trail Round-Up reported 20,000 attendees in June 2025, a promoter's figure [7]. Lockhart State Park recorded 74,469 visits in 2025 and added 188 acres in 2026, figures taken from an encyclopedia entry because the parks department's own count was not retrieved [8]. These are peaks. No source gives monthly fuel volumes, so the model carries no event revenue; visitor traffic is upside, not underwriting.

A well-supplied town

Texas had 16,504 convenience stores at the end of 2025, more than any other state, and the country had one store for every 2,257 residents [11]. Lockhart's directories list 16 fuel sites for 18,159 people, far denser than that national ratio before any through-traffic is counted. The town is not underserved. The case for a new store is not a gap in coverage; it is a newer, larger format taking share from an older field while the vehicle count grows.

The subject is a hypothetical pad of about two acres on the US 183 corridor through Lockhart, in a commercial district that permits a fuel and convenience store. Both are conditions to confirm: the district, and that the pad lies inside city limits, where the city's zoning and the overlay discussed below apply. The city has placed the use in a commercial district before: the 2022 Cesar Chavez Parkway rezoning noted under new supply moved a tract from Agricultural Open to CHB for a convenience store with a gas station [19].

Zoning: two open questions

The first is whether the site's district lets a convenience store sell gasoline by right. Lockhart's code defines a convenience store as one that may include gasoline sales and separates uses that are "Allowed", meaning by right, from uses that are "Permitted", meaning subject to a Specific Use Permit [23]. The research did not reach the use table for fuel sales in the commercial districts. A written determination from the city is the first zoning condition.

The second question is the entrance-corridor overlay. The city council adopted its text on March 17, 2026. Inside the overlay, gas stations and convenience stores need a Specific Use Permit, truck stops and travel plazas are prohibited, buildings sit behind a 50-foot front setback and a 15-foot landscape buffer is required [22]. The map that would apply the overlay to US 183 properties went to a Planning and Zoning hearing on August 26, 2026, was continued, faces a workshop on October 28, 2026 and returns for hearing on November 18, 2026 [22]. If the subject's frontage is mapped, the store needs a permit regardless of what the district allows, and the setback moves the canopy deeper into a two-acre lot. No typical permit timeline was found.

Utilities

The City of Lockhart supplies water and sewer; electric service comes from either the city or Bluebonnet Electric Cooperative, and which one serves the parcel was not determined [24]. Texas Gas Service supplies natural gas to the school district [32]; parcel service was not confirmed. Non-residential water costs $8.12 per 1,000 gallons and wastewater carries a fixed charge of $25.08 a month, both from November 2025 billing [25]. The city's demand-metered electric tariff adds a purchased power cost approved by Council in October 2007, and the rate page does not show its current value [26], so the model treats utilities as an allowance. Road, water and wastewater impact fees date to Ordinance 02-02 of January 15, 2002 and are collected at building permit; the commercial amounts are not published [27].

Traffic, flood and environment

No TxDOT count station, annual average daily traffic or count year for US 183 at the site was found; the state's count dataset exists [28] and should be queried. The FEMA flood zone, the parcel identifier and any environmental record were not found either. For a fuel site the environmental file is not optional: gas station loans carry a Phase I environmental site assessment regardless of loan size, with tank and line testing documented [42].

The county's budget document prints a rate one hundredth of a cent above the appraisal district's table [30]; the study uses the appraisal district. The combined figure is an arithmetic sum, not an official rate for the parcel, because the special districts that cover the parcel were not confirmed and the college district's reach was not found.

Payroll is the largest cost. The model staffs 2.4 people on the floor every hour for 24 hours a day at $15.04 an hour, the 2025 national average c-store wage [33], plus 18.0% for payroll taxes and benefits. Yesway averages 2.6 employees per shift across its stores [35], and NACS counts 19.9 employees per store [33]; the subject is a single store with a kitchen, so it sits just below Yesway's figure. Twenty-four-hour service follows the two Valero stores on the same highway, both of which list it [12][13].

Card fees are charged in two ways. On fuel the model uses 8.4 cents a gallon, the industry figure for 2023 [34]. On inside sales it applies the industry's 2025 ratio of card fees to total sales [33]. Card costs were a record for the industry in 2025, so this is not a line to trim.

Property tax is the line that most separates a new store from an old one. The model taxes the cost of land, building, tanks, site work, dispensers and fixtures at 1.96%, the 2025 combined rate above, on the assumption that the appraisal district values the store near its cost. The appraisal ratio and the parcel's district list were not found, so the appraised value is a lender condition. Utilities, repairs and tank compliance, insurance and administration are allowances, each explained in the inputs table, and a replacement reserve funds dispensers, coolers and kitchen equipment.

Operating costs reach $930,108 in Year 3, leaving net operating income of $412,352. Year 1 is thin: $174,745 while the store builds its customer base.

The loan is tested under SOP 50 10 8.1 with Technical Policy Updates, in force for applications from October 1, 2026 [44]. A start-up puts in at least 10% of project cost, and its projected coverage must reach 1.15x within two years, which is why Year 2 is the test year here. A single 7(a) loan tops out at $5 million; the sponsor's 15.0% equity proposal exists to stay under that line. Because real estate is well over half of the proceeds, the whole loan can run 25 years.

The rate is Prime of 7.00% on the October 9, 2026 H.15 release [46] plus the maximum variable-rate spread SBA allows at this loan size, 10.00% in all. A lender may price lower, and the final rate is set at pricing; a lower rate helps, but even a full point off does not close a gap this wide. SBA guarantees 75.0% of a loan this size [43], and the FY2027 upfront guaranty fee follows the schedule in the program's fee notice [45].

Three program rules bear on a fuel store in particular. Gas stations are on SBA's list of special purpose properties [44]; under 504 a new business on such a property puts in 20%, which is one reason this sponsor chose 7(a). Fuel supply agreements covered by the Petroleum Marketing Practices Act fall within SBA's definition of a franchise [52], so the brand agreement goes into the file. And since March 1, 2026, every owner must be a U.S. citizen or national; the notice that briefly allowed up to 5% foreign ownership was rescinded [48]. Our note on special purpose property risk covers why lenders lean on going-concern value for assets like this, and our SBA 7(a) and 504 practice page sets out the full rule set.

The feasibility study itself is the lender's call. Under 13 CFR 120.160(b): SBA may require professional appraisals, a survey, or a feasibility study [47]; on a ground-up special purpose project with a start-up borrower, most lenders ask for one.

As proposed, coverage is 0.33x in Year 1, 0.62x in the Year 2 test and 0.78x at stabilization. Annual debt service of $528,372 is larger than the store's stabilized income. No reasonable revision of the operating assumptions closes that gap: the store would need far more volume than the national average to carry a loan of that size at this rate.

The engine restructures by raising equity until Year 2 coverage meets the floor. At 53.2% equity, debt service falls to $287,748 and Year 2 coverage reaches 1.15x, rising to 1.43x in Year 3. That is a sound loan on these assumptions. It is also a loan of $2,638,826, a little over half of what the sponsor wanted.

There are three ways to reach a structure like this, and the lender should ask which one the sponsor intends. The sponsor can bring the cash. The sponsor can buy the land below the assumed level, which lowers both cost and debt; the sensitivity table quantifies it. Or the sponsor can find a cheaper site off US 183, which changes the volume case and needs its own study. What does not work is the original request.

Set beside the other fuel cases in this series, Lockhart is the one where the market is strongest and the cost is the obstacle. The Lake Wales, Florida start-up has cheaper land but fails on share, because national chains already hold its highway. The Versailles, Ohio start-up has the cheapest land of all and fails on the size of its village. The Opelika, Alabama case shows the acquisition route, where a buyer is tested on a seller's actual earnings rather than a ramp, and the Cartersville, Georgia case tests an interstate exit. Read together, they show that the land line and the competitive set decide a new store's loan long before the pump count does.

The two drivers in this table are the two that decide the Lockhart case. Rows move fuel volume up and down by up to 20%. Columns move the land cost 15% and 30% either side of the assumed level, holding the restructured equity share fixed, so a cheaper parcel lowers both project cost and loan size and a dearer one raises both. The table reads Year 2, the test year, and ranges from 0.78x to 1.59x.

Volume is the stronger lever: a 10% shortfall in gallons pushes the Year 2 test below the floor at the assumed land cost. Land 30% under the assumption earns that shortfall back and 15% under does not, which is the practical lesson for the sponsor: negotiate the land before negotiating the loan. Land 15% or 30% over the assumption takes the test below the floor even at full volume. Neither lever on its own turns the original 15.0% equity request into a bankable loan; that would need volume or margin far beyond any benchmark in this study.