Gas Station Loans – Financing for Gas Stations
Gas Station Loans are very common and Custom Mortgage is able to help you close your next gas station financing transaction. Getting these types of property loans has been challenging for years in the traditional commercial financing arena. You’re probably thinking your best bet to acquire a gas station loan is through your bank. Little do most people know, banks in general do not like to finance stations for the following reasons:
- Gas stations are a big liability for lenders if properties are ever foreclosed on. For other income producing properties, the lending institution can continue collecting rent until a suitable buyer is present. Banks do not get involved so much as to step in and run gas stations in the case of a default.
- Gas stations presents environmental risks that are not present in other types of other commercial loans. It is easier to evaluate a loan where there is significantly less of an environmental risk.
Commercial Real Estate Loans and Financing for Gas Stations
Custom Mortgage is a leading provider of gas station loans for commercial properties. Recently, because of concerns regarding the enviroment, financing for gas stations have become increasingly difficult. We understand how to address these challenges and have many financing options for gas station properties and businesses.
Gas Station Financing – Properties that are Eligible
- Loans Must be Secured by Real Estate – No Business Only Financing
- Brand or Non-Branded acceptable
- Investor or Owner Operated
Programs Available for Gas Stations
- Start Up Businesses not accepted, only Established Businesses for great than 1 year
- SBA Programs
- Non-SBA Loans
Gas Station Commercial Loans – Program Highlights –
- Minimum Gas Station Commercial Loan Size $150,000
- Amortized over 15/20/25/30
- Fixed and Variable Rate Options
- LTVs up to 80%
- Many Prepay Options
- Full Document or Stated Income
- Minimum 580 FICO Score
- Full Recourse
Initial Gas Station Loan Documentation Requirements
For conideration for financing, the following documents may be requested:
- 3 Years Business and Personal Tax Returns
- Personal Financial Statement Dated Within the Past 60 Days
- Business Interim Financial Statements
- Supplier Agreement
- Franchise Agreement if Applicable
- Phase 1/Phase 2 Report
- AR/AP Schedules
- Purchase Agreement if Applicable
- Borrower’s Credit Report – Borrowers may pull their own credit report and submit with loan application package. Report must show all three bureau scores.
- Statement Addressing Negative Items on Credit Report if Applicable
Gas Station Loans
Custom Mortgage has proven expertise in financing gas stations, He has to his credit some very difficult deals including contaminated sites. Gas stations have become increasingly competitive over the years for a variety of reasons. Margins continue to decline with major brands like ARCO operating on as low as 5 to 7 cent margins per gallon of gas. Environmental laws have become tougher. Thus, it is essential to have to have a profitable Convenience store attached to the gas station. Most of the profit comes from the store. The gas just pays of the basic bills and more importantly draws customers to the Convenience Store. The convenience store must have a clean neat well lit professional experience. Must have a wide selection of items: Soda Dispenser; Sodas, Juices, Beers, Wines, Packaged Deli foods, Ice Cream, Snacks, First Aid and other Household Convenience Items, Baked Goods etc etc As a general rule the more the inventory the more the sales. Proper display and merchandising is crucial as is friendly personalized customer service.
Having existing or expanding a Gas Station to include a fast food franchise or other prepared foods may help in acquiring better financing terms . Gas Stations have a large cash component and a lot of liquid inventory. Prior to financing the first step is to make sure you know as much as possible about the property or business you are buying and that the business is profitable.
Once you have determined that the Business is profitable, the next step is analyze the Business Tax returns of the Gas Station for the last 2-3 years to see if profits are documented and to see what kind of loan the Business will support. The down payment must be sourced and verified which also cannot be borrowed funds (exceptions are there). Gift funds from a close relative may be acceptable depending on other risk factors.
Gas station loans can be very tough to aquire and we are willing to provide you with the most comprehensive team of expert loan officers to ensure your success. With our solid experience in financing, we are able to get you gas station financing. You can get financing for the business with or without a property. Our interest rates are typically the Wall Street prime plus 1.5 to 2.75 % only. The down payment for gas station loans is approximately 20% but will vary depending on your qualifications.
We offer financing solutions for gas stations all over the United States and you can get a you pre approval within a few business days after you submit the required documentations. If you are thinking of a loan for a gas service station then give us a call and we will offer you opinions on gas stations for sale and we will also offer you different gas station financing options. We fund NATIONWIDE.
Convenient Gas Station Financing Solutions
Planning to remodel, expand, or buy a fueling station? Having trouble with finances amidst this plan? Custom Mortgage has the right resources and experience in the gas station financing industry. Our experts can offer suitable financing solutions and bring a sigh of relief while offering you the right gas station loans so that you don’t have to worry about your future plans.
At Custom Mortgage, we clearly understand the troubles associated with the gas station industry and help you with the appropriate gas station loans. Our experts work upon a streamlined and fully-optimized loan process from scratch till the end. Custom Mortgage holds a proven track record of delivering excellent gas station financing services to numerous gas stations, service stations, and other properties.
Challenges Faced While Opting For Gas Station Loans
Gas stations demand good finances for numerous needs, from purchasing fuel, maintaining equipment, to adding new inventories. And getting funds for these expenses becomes a real pain for the gas station industry. Due to environmental changes and other factors, major gas station lenders, traditional banks, and SBA’s refuse to provide loans to this industry. There are several major challenges the industry undergoes while applying for a gas station loan.
Majority of the customers pay in cash to the gas station industry while purchasing, so the business owners have to depend on the tax returns so as to qualify the loan criteria.
If you have falling sales record, low cash flow, traditional banks directly refuse to give a loan. And if you have a bad credit score, again traditional banks are going to decline your loan.
If yours is a startup business, traditional banks are going to decline loans because they demand a minimum of three years of business in that industry.
Various gas station loans you can opt for
Multi-service gas stations require funding for several tasks like storing clerks, hiring fuel station attendants, and so on. Amidst this, they might face various cash flow problems and seek loans from the gas station lenders. But banks directly refuse to give them loans, and this is where Custom Mortgage makes an entry. We offer gas station loans and financing solutions that can help in seamless operations of these fuel stations. We clearly understand the business needs and offer the best loan services for gas stations.
When traditional banks are unwilling to offer loans, you can rely on various alternative vendors who emphasize on your business potential, rather than looking upon other pitfalls and risks involved. This option is better to seek a gas station loan because it offers more flexible and easy-to-opt services as compared to SBA or traditional banks. And being a borrower, you need to choose a reliable vendor out of all gas station lenders so that he can cater to your present and future financing needs. Going for an alternative vendor comes with a faster application process and increases the chance of getting loan approval faster than in case of traditional banks. Moreover, this alternative focuses more on your business potential rather than checking your credit score history.
Traditional bank loans: Traditional bank loans are highly preferable as they provide great rates with low fees. Under this, the scope of risk is very low. The only negative point is that getting these loans demand an excellent credit score and a minimum three years in the business with valid documents like- balance sheets, tax returns, and various financial documents.
SBA loans: SBA loans come with affordable rates and offers the best terms for all sort of commercial loans. These programs offer better funding options to the startup owners because it has better rates and terms as compared to alternate commercial funding options.
Alternative gas station loans: If the borrower has a low credit score, going for an alternative gas station loan is the right choice as it offers to finance at reasonable rates. It comprises of high approval rate, quick funding, and there are fewer documents required as in case of traditional bank loans.
Types of available financing methods
If you have the plan to buy a gas station, it is recommendable that you go for a professional gas station lender who can assist you with your funding options. Moreover, there are various other methods to get enough funding and start your new gas station.
Retirement funds: People can even use a small share of their retirement funds and savings to start their fuel station. This is a better viable option that can be availed in almost four weeks and doesn’t accompany any tax or penalties.
Seller Financing: In this, the seller will offer a loan to the buyer, and he’ll pay the down payment of around 15 to 20% to the seller. Further, the buyer will pay the installments over the specified interest rate and defined time period.
Alternative Financing: Going for an alternative financing specialist can get you the relevant loan in the minimum time period while keeping you covered with the suitable funding options and other things during the complete financing process.
Documents required for getting a gas station loan
Latest three years personal tax returns.
Personal financing statement (PFS) of your personal assets and income.
Details of past bankruptcies, if any.
Business Interim financial statements.