Compressed Gas Cylinder Delivery
The oxygen tanks, argon, and CO2 that every welder and brewery needs
Bottom line
Worth studying, but do not buy without strong local proof.
Compressed gas distributors deliver cylinders of industrial and specialty gases — oxygen, acetylene, argon, nitrogen, CO2, and helium — to welding shops, breweries, restaurants, dental offices, medical clinics, and laboratories on recurring fill schedules. The cylinders themselves are leased to customers, creating a steady rental income stream on top of product sales. Switching costs are extremely high: customers don't want to return borrowed cylinders or reset accounts.
Avg Revenue
$900K
Profit Margin
28%
Acquisition Multiple
2.5x - 4.5x
Startup Cost
$200K - $600K
How It Works
The distributor maintains a cylinder inventory (owned assets worth $100–$500 each), fills them at a bulk gas supplier, and delivers on scheduled rounds to business accounts. Customers pay cylinder rental fees ($10–$30/month per cylinder) plus product fees per cubic foot of gas consumed. A delivery driver covers a route of 40–80 stops per day. The cylinder rental model means revenue continues even when a customer's gas usage drops — the cylinders just sit on their dock generating rent.
Revenue Range
BizBite underwriting snapshot
Pass for now
Compressed Gas Cylinder Delivery has enough high-level data for a first look, but BizBite has not assigned a category-specific operating model yet. Treat the score as preliminary.
Category-level fit before lender-specific diligence.
Weak source data caps the final score.
Why it may work
- +SBA dataset shows 14 recent comparable loans
Be careful
- !Source link status has not been verified yet
- !No last-checked date yet
- !No category operating model yet
- !No category model yet
Real Acquisitions in This Category
SBA 7(a) change-of-ownership loans · NAICS 424690 · Other Chemical and Allied Products Merchant Wholesalers
Deal Size Distribution
Deal Flow Over Time
Financing Profile
Recent Comparable Deals
| Closed | State | Loan | Implied deal |
|---|---|---|---|
| Feb 2026 | FL | $50K | $59K |
| Feb 2026 | FL | $575K | $677K |
| Nov 2025 | OH | $706K | $831K |
| Sep 2025 | GA | $1.7M | $2.0M |
| Jun 2025 | IL | $3.9M | $4.6M |
| May 2025 | CO | $893K | $1.1M |
| Feb 2025 | PA | $315K | $371K |
| Jan 2025 | PA | $1.4M | $1.6M |
| Oct 2024 | MA | $250K | $294K |
| Oct 2024 | MA | $4.3M | $5.1M |
Source: SBA 7(a) FOIA dataset, filtered to acquisitions (loans where business age is "Change of Ownership"). Implied deal size assumes an 85% loan-to-purchase ratio, a common SBA change-of-ownership structure. Charge-off rate shown only when 10+ loans have resolved (paid in full or charged off). Interest rates reflect last 24 months only. Actual deal values vary with equity injections, seller financing, and working capital terms.
Pros
- +Cylinder rental income provides a revenue floor independent of consumption — customers pay to hold your asset
- +Industrial and medical clients sign annual or multi-year supply agreements with automatic renewal
- +Switching suppliers requires returning cylinders and re-qualifying new ones — most clients never bother
- +Diverse customer base (welders, breweries, medical, restaurants) provides recession resilience
Cons
- -DOT hazardous materials regulations govern transport, storage, and cylinder testing — ongoing compliance cost
- -Large national distributors (Airgas, Praxair/Linde, Air Products) compete aggressively on price for large accounts
- -Cylinder inventory is a significant capital asset that must be tracked, inspected, and recertified every 5–10 years
Best For
Route-minded operators who want a capital-asset business with recurring rental income and sticky B2B accounts
Operating Costs
At $900K revenue: bulk gas sourcing runs 35–40% of revenue, delivery labor adds 15%, cylinder maintenance and DOT compliance adds 5–8%, and vehicle/facility costs add 8–10%. Net margins of 25–32% are typical for independent distributors. Cylinder rental income (often 15–20% of total revenue) carries near-100% margins.
SBA Financing Estimator
Adjust the deal — see if it cash flows after debt service
Estimates only. Excludes owner compensation, capex, working capital draws, and taxes. Margin assumes average occupancy and volume. Actual SBA terms vary by lender and borrower profile.
Where to Buy
Search for gas distribution and route business listings
Industry standards, safety data, and market information for compressed gas distributors
Acquisition Score
Scores margin (30), entry multiple (25), SBA market depth (20), category risk (15), and deal momentum (10). Higher = better acquisition candidate.
Quick Facts
- Category
- route
- Difficulty
- 3/5
- Buy price
- $2.3M–$4.0M
Buyer's Toolkit
Essential tools to get started
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Largest business-for-sale marketplace in the US
SBA loans and business acquisition financing — get funded fast
ROBS financing — use retirement funds to buy a business tax-free
Bookkeeping for small business owners — hands-off financials
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