For service station owners, securing finance is often a key part of growing, refinancing, or selling the business. However, many are unaware that one of the biggest obstacles to approval is the site’s environmental condition. Lenders today want confidence that a property is not exposed to hidden contamination or regulatory risk. If your site is not environmentally ready, your finance application could stall or fail altogether.
Nick Caltabiano, General Manager at environmental consulting firm NEO Consulting, provides environmental due diligence to service stations, banks, developers, and land buyers across Greater Sydney and New South Wales.
Nick shares that a strong understanding of the environmental health of your site is essential when it comes to securing finance or negotiating a sale. Without clear evidence that your property meets environmental expectations, banks are unlikely to move forward.
Environmental Risk and Bank Decisions
Fuel retail sites are viewed by lenders as high-risk locations due to their potential for underground contamination. This is especially true for older service stations where storage systems may be outdated or poorly documented. Before offering finance, banks often require a detailed understanding of the site’s condition.
That process typically begins with environmental reports. A Preliminary Site Investigation may be requested, and in more complex cases, a Detailed Site Investigation. If these reports raise concerns about soil or groundwater contamination, or show a lack of monitoring and testing, lenders may delay approval, adjust terms unfavourably, or walk away entirely.
Common Red Flags That Delay Finance
NEO Consulting has worked with many operators who have had finance held up due to avoidable environmental oversights. These include:
- No monitoring wells installed on the site
- No recent tank or line integrity tests available
- An outdated or missing Fuel System Operation Plan
- Lack of recent soil or water testing
- Absence of a remediation plan for known issues
- Evidence of previous leaks without validation reports
Even if a site is operating smoothly, the absence of this documentation is enough to raise concern with lenders. From a risk management perspective, banks need to know that your site has not contributed to environmental damage and is unlikely to do so in future.
Proactive Steps to Get Bank-Ready
The best way to prepare for a finance application is to think like a buyer or lender. NEO Consulting encourages site owners to carry out environmental assessments before approaching the bank. These assessments identify potential issues early and provide evidence that you are actively managing your environmental responsibilities.
NEO offers a range of services to support this process, including:
- Site investigations with reporting that satisfies council and lender requirements
- Groundwater and vapour well installation and monitoring
- Tank and line testing with full documentation
- FSOP preparation and updating to meet regulatory standards
- Remediation and validation plans for contaminated sites
By investing in these services, owners reduce their exposure to risk and position themselves as responsible operators. This creates confidence with lenders and can significantly streamline the finance process.
The NEO Advantage
NEO Consulting understands the pressures and timelines involved in refinancing or selling a petrol station. Their team works quickly to deliver clear, regulator-approved reports and environmental solutions that banks and councils trust.
If you are planning to apply for finance, or are in early discussions with a lender, now is the time to get your site in order. The longer you wait, the harder it becomes to respond to requests and correct issues.
For the latest retailer news and information, check out the ServoPro website or to speak to us about how we can help your business contact us.