USDA B&I Travel Center and Truck Stop Feasibility Studies

Truck stops and travel centers are eligible commercial enterprises under the USDA Business and Industry guaranteed loan program, and the program fits them well: guaranteed loans up to $25,000,000 per borrower, terms up to 40 years with no balloon, and an 85 percent guarantee on loans under $5,000,000 and 80 percent from $5,000,000 to $25,000,000 in fiscal year 2026. Under 7 CFR 5001.306 a guaranteed loan greater than $1,000,000 to a new business requires a feasibility study prepared by an independent qualified consultant, and a new business is any enterprise with fewer than one full year of operation or one that has not reached stable operations. MMCG Invest prepares USDA travel center feasibility studies on a fixed fee, structured to the five Appendix A components and to the three questions that decide whether a travel center loan reaches the State Office: whether the interchange is rural, whether gaming revenue stays inside the 15 percent limit, and whether diesel, inside sales and parking cover the debt.

The trigger is set by 7 CFR 5001.306(a)(3)(i): a feasibility study prepared by an independent qualified consultant acceptable to the Agency is required for guaranteed loans greater than $1,000,000 to a new business. A new travel center under construction, a fuel stop converting to a full-service travel center, and an existing operator opening at a new interchange all meet the definition of a new business under 7 CFR 5001.3. Below the threshold, and on acquisitions of operating travel centers, the Agency may still require a study where the lender's credit evaluation is not sufficient, and the scope of every study is determined by the Agency. The study is part of the complete application. The lender submits projected balance sheets, income statements and cash flows running through at least two years of stable operations, each supported by a list of assumptions, and the lender's credit evaluation must contain a written evaluation of the feasibility study with ratio comparisons against industry standards. Equity is set by 7 CFR 5001.105: 10 percent balance sheet equity for an existing business, and for a new business 20 percent balance sheet equity or 25 percent of total project cost, rising to 25 percent when the lender requests the loan note guarantee before construction is complete. For fiscal year 2026 the initial guarantee fee is 3 percent, the annual retention fee is 0.55 percent, and a 0.5 percent fee applies where the guarantee is issued before completion of construction. State Directors approve B&I loans up to $5,000,000 at the base level and up to $10,000,000 at the maximum level; larger loans go to the National Office. Guaranteed loans over $1,000,000 that add more than 50 jobs require Department of Labor concurrence. Lenders can expect a response within 30 to 60 days of a complete application, and feasibility studies are an eligible use of loan funds under 7 CFR 5001.121(c)(10), so the fee can be financed.

A rural area is any area other than a city or town with a population greater than 50,000 inhabitants and the urbanized area contiguous and adjacent to that city or town. Interstate interchanges are where travel centers want to be and where that test is hardest to pass, because the Census urban area boundary often follows the interstate out of a metropolitan area and sweeps in the interchange parcels along it. Two rules in the regulation decide the close cases. The first is the string exception: an area attached to the urbanized area of a city over 50,000 by a contiguous strip of urbanized census blocks no more than two census blocks wide is treated as rural. Interchange parcels strung along an interstate corridor frequently sit in exactly that kind of strip, and the test is applied block by block, not by eyeballing the eligibility map. The second is the rural in character determination under 7 U.S.C. 1991(a)(13)(D), which the Under Secretary for Rural Development can make on petition from a unit of local government through the State Director, or on the State Director's own initiative, for an urbanized area whose boundary points lie at least 40 miles apart and that is not contiguous with a city over 150,000, or for an area inside an urbanized area that lies within one quarter mile of a rural area. The authority cannot be redelegated, Rural Development publishes a 30-day public notice for each petition, a negative decision can be appealed within 10 business days, and a determination expires when the next decennial census data becomes available. Rural Development treats every Census 2020 urban area as an urbanized area and treats non-contiguous pieces of an urban area as eligible. MMCG screens every travel center site against the current eligibility map, the census block geometry and the string exception before the engagement begins, and states the finding in the study so that the lender submits a site the State Office can approve.

Under 7 CFR 5001.127(b), an entity is ineligible if it derives more than 15 percent of its annual gross revenue, including any lease income from space or machines, from gambling activity, excluding State-authorized lottery proceeds or Tribal-authorized gaming proceeds, as approved by the Agency, conducted for the purpose of raising funds for the approved project. The exclusion has three conditions, and a truck stop's video gaming terminals rarely meet them: the activity must be a State-authorized lottery or Tribal-authorized gaming, the Agency must approve it, and it must be conducted to raise funds for the approved project. A truck stop's share of machine revenue is operating income, not a fundraising lottery for the project, so MMCG models every terminal as counted unless the Rural Development State Office confirms otherwise in writing before the lender submits.

The state regimes differ in form but not, for this purpose, in treatment. Illinois regulates truck stop machines under the Video Gaming Act as gaming: a truck stop with at least three acres, a convenience store, separate diesel islands and more than 10,000 gallons of diesel a month may hold up to six terminals, and a large truck stop within three road miles of a freeway interchange selling more than 50,000 gallons a month may hold up to 10. Pennsylvania licenses truck stop establishments with at least three acres, diesel islands averaging 50,000 gallons a month and 20 commercial vehicle parking spaces for up to five terminals. Louisiana licenses qualified truck stops on at least five developed contiguous acres with a 50-seat restaurant for video poker devices scaled to fuel sales. Montana permits up to 20 machines under a gambling operator license. West Virginia's limited video lottery and South Dakota's video lottery are run by state lottery commissions, and Georgia's coin operated amusement machines are regulated by the state lottery corporation, but none of them is conducted to raise funds for a borrower's project, so they are treated as counted until the Agency says otherwise. The arithmetic usually favors a fuel-led site. In fiscal year 2025 the Illinois locations running the 10-terminal maximum averaged $1,313,230 of net terminal income each, and after the 35 percent state tax and the statutory split with the terminal operator the establishment kept about $427,000. Against a travel center with $25,000,000 of gross revenue that is under 2 percent, and even gross net terminal income is about 5 percent. The test binds only where fuel is weak: a site below roughly $3,000,000 of gross revenue on the establishment share basis, or below roughly $9,000,000 if the Agency counts gross terminal income. A properly fuel-anchored center passes comfortably; a gaming parlor with pumps does not. MMCG models gaming revenue as a share of gross revenue for every projection year, shows the ratio at 10, 15 and 20 percent sensitivities, and presents debt service coverage with and without gaming so that the lender does not depend on it.

The study is structured to the five Appendix A components. The economic component covers the site and the corridor: the classified truck count at the interchange, the freight origins within one hours-of-service driving day, labor availability, utilities, highway access and the environmental risks the Agency evaluates separately under 7 CFR 5001.207. The market component covers diesel demand and capture, a field survey of every competing fuel stop and its truck parking, the parking shortage on the corridor, and the inside sales, foodservice, truck service, diesel exhaust fluid and parking revenue the site can win from captured trucks. The technical component covers the site plan, the diesel and auto canopies, the underground storage tank system under the 2015 federal UST rule, the truck court, stormwater permit coverage for any site disturbing more than one acre, the Phase I Environmental Site Assessment and any fuel supply or brand agreement. The financial component presents the development budget, the sources and uses tested against the 20 or 25 percent equity requirement, projections through two years of stable operations, debt service coverage on the Agency's definition, sensitivity cases on gallons, cents per gallon margin, inside sales and parking occupancy, and breakeven gallons. Fuel margin is built from site-level cents per gallon rather than national shares, because in May 2026 the federal Energy Information Administration attributed 23 percent of the $5.60 retail diesel price to distribution and marketing, a gross figure that captures freight, retail operating cost and margin together. The management component evaluates the sponsor's fuel retail experience, the fuel supply relationship and the staffing plan. Where the project also seeks SBA financing, the study is scoped to satisfy both reviews.

Federally recognized Indian tribes are eligible B&I borrowers under 7 CFR 5001.126, subject to the same rural area test and the same requirement that the loan be collateralized with fixed assets that remain in the United States. Tribal interchange sites can qualify: USDA's 2022 awards included a $4,978,000 guarantee for a truck and RV wash on tribal land adjacent to an interstate exit in Arizona. Two structural questions decide a tribal travel center application. The first is the casino. The exclusion for Tribal-authorized gaming proceeds carries the same Agency approval and project fundraising conditions as the lottery exclusion, so a travel center with a casino floor inside the borrower entity faces the 15 percent test on the combined revenue. The usual answer is to hold the casino in a separate entity outside the borrower and any co-borrower, and because 7 CFR 5001.126(a)(2) requires co-borrowers where entities depend on each other, that separation has to be real in ownership, cash flow and operations. The second is land tenure. A travel center on trust land is financed through a leasehold mortgage approved by the Bureau of Indian Affairs, with a limited waiver of sovereign immunity, an agreed forum and governing law, and a title status report for every parcel, which matters most on checkerboard corridors where trust, allotted and fee parcels alternate along the interstate. State fuel tax, tribal sales and possessory interest taxes and any payment in lieu of county property tax vary by state and by tribe, and MMCG models the stack that applies to the parcel rather than a generic rural tax burden.

The Rural Energy for America Program finances energy efficiency improvements and renewable energy systems for rural small businesses, and REAP guaranteed loans continue under 7 CFR Part 5001 after USDA's October 1, 2026 REAP rule, which moved REAP grants to a post-completion reimbursement model and made feasibility studies an unallowable grant cost. For an existing independent travel center, LED lighting, HVAC, high-efficiency refrigeration and walk-in cooler retrofits are the cleanest REAP uses. The borrower must be a rural small business or agricultural producer, must inject matching funds of at least 25 percent of eligible project cost, and the guarantee covers a loan of up to 75 percent of eligible project cost. Solar carries eligibility risk. Since USDA's August 2025 policy, ground-mounted solar above 50 kilowatts that cannot document historical energy usage is ineligible for REAP guaranteed loans, components from foreign adversaries are barred, and solar no longer qualifies for B&I at all. Canopy or rooftop solar at a travel center remains possible when it is sized to documented usage, but new-build efficiency scope belongs inside the B&I capital stack rather than a REAP grant. Our USDA REAP feasibility study page covers the technical report tiers and the guaranteed loan requirements in detail.

USDA's published 2022 awards show the range of fuel and travel projects the program guarantees. They included a $9,736,000 guarantee to build a new gas and diesel fuel stop in California with commercial truck diesel pumps, a convenience store and a restaurant, an $8,605,000 guarantee for a travel plaza in the Sierra Nevada, a $2,500,000 guarantee to expand a convenience store and add fuel pumps visible from Interstate 94 in North Dakota, a $14,550,000 guarantee for an operator of 13 convenience stores across eastern Kentucky and West Virginia, and the $4,978,000 truck and RV wash on tribal land in Arizona. Across the program, USDA obligated $2.11 billion of B&I guarantees in fiscal year 2025, and the average guarantee has risen to about $8,100,000, which is the scale of a full-service travel center. The precedents share three features that a new application should match: a fuel-led revenue base that makes any gaming share small, a site that passes the rural test without a petition, and job creation that supports the Agency's priority scoring.

The two programs are usually complements rather than alternatives, because the site decides. SBA 7(a) and 504 reach $5,000,000 each and $10,000,000 combined, with 25-year real estate terms, 10 to 20 percent equity, a 1.15 times coverage floor on standard 7(a) loans and 1.25 times on acquisitions, and no geographic limit. B&I reaches $25,000,000 with 40-year terms, 20 to 25 percent equity for a new business, no numeric coverage floor but a global historical and projected coverage analysis, and a feasibility study required by regulation rather than at the lender's option, but only on rural sites. A full-service travel center on a rural interstate interchange with a $12,000,000 to $20,000,000 budget is a B&I project, because SBA cannot reach the loan amount. A smaller fuel stop, an expansion or an acquisition inside an urban area is an SBA project. MMCG scopes the study to the program the site supports, and where a lender wants both options open, to both. Our truck stop feasibility study page covers the SBA requirements and the asset class in full.

MMCG USDA travel center feasibility studies typically range from $8,000 to $16,000 on a fixed fee, depending on the number of revenue streams, the gaming and tribal questions the site raises, and whether the study must also satisfy an SBA lender. A fuel stop with a convenience store sits at the lower end. A full-service travel center with truck service, a restaurant, a truck wash and video gaming, or a tribal site with trust land tenure, sits at the higher end. Every engagement receives a fixed-fee proposal. Payment terms are 50 percent at engagement and 50 percent on delivery. Standard delivery is 9 to 16 business days, with rush turnaround available from 5 days. Feasibility studies are an eligible use of B&I loan funds under 7 CFR 5001.121(c)(10). Every MMCG study carries a written acceptance guarantee: revisions required by the lender or by USDA are made at no additional cost.

Engagement runs in four steps. First, a scoping call with the principal to confirm the site, the eligibility screen, the gaming program, the fuel program and the lender's requirements. Second, a response within 12 business hours and a fixed-fee proposal with the engagement letter and a document request list covering the site plan, the development budget, the fuel supply or brand agreement, any gaming license application and any environmental reports. Third, research, field survey, traffic analysis and modeling, with a draft issued to the client and the lender for factual review. Fourth, delivery of the final study with the preparer's qualification statement and independence disclosure the Agency asks for, followed by revisions required by the lender or USDA at no additional cost.

Michal Mohelsky, J.D. | Principal | MMCG Invest, LLC Contact: michal@mmcginvest.com Phone: (628) 225-1110

Michal Mohelsky, J.D., is the founder and principal of MMCG Invest, LLC. He has led feasibility studies supporting $2.3 billion of total construction cost and $1.7 billion of loan amount between January 1 and September 1, 2026 across more than 30 commercial real estate asset classes for national lenders, SBA Certified Development Companies, USDA guaranteed lenders and federal agencies. He holds a J.D. from Charles University Faculty of Law and is FMVA certified.

Engagements are led by Michal Mohelsky, J.D., Practicing Affiliate of the Appraisal Institute. Feasibility studies are prepared under USPAP discipline, aligned with 7 CFR Part 5001, Appendix A to Subpart D, for USDA Business and Industry and REAP financing and with SBA SOP 50 10 8.1 for 7(a) and 504 loans. Engagements start at $4,900 with fixed-fee scoping. Standard delivery is 9 to 16 business days, with rush turnaround available from 5 days. A senior analyst responds to proposal requests within 12 business hours from the firm's San Francisco office at 27 Maiden Lane, Suite 625.