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.