GAS STATION FINANCING
Gas stations are an essential part of the American economy. Whether you need $500,000 to refinance a medium-sized gas station, or $2 million to acquire a brand new one, PHD Financial can place you with the right loan product.
Types of loans that may be used for gas station financing include:
- SBA Loans
- USDA Loans
- Conventional Loans
- Hard Money or Bridge Loans
SBA Loans for Gas Stations
Many gas station owners find that the SBA 7(a) or SBA 504 loan programs are a great way to finance their businesses. Unlike traditional real estate financing, SBA 7(a) loans can be used to purchase equipment and provide working capital for gas stations. This makes these loans a lot more flexible than many others. Additionally, SBA loans can offer up to 80% LTV on gas station properties. Though there are benefits with SBA loans, they do require potential borrowers to have a great credit score and little existing debt.
Gas Station Loan Terms
Loan terms can vary based on the individual customer, however, generally, gas station loan terms include:
- Loan Size: $500,000+
- Loan Purpose: Loan can be used for property acquisition or refinancing, but cannot be used for business only-financing
- Loan Term: 3, 5, 10 and 15-year fixed rate terms
- Amortization: 15, 20, 25 and 30-year options
- Leverage: 75% LTV allowance (subordinate debt allowed)
- DSCR: 1.40 minimum DSCR
- Credit Score Requirement: 660 minimum
Funding a gas station through the conventional loan process can be less cumbersome and faster than seeking government backing, but they are typically harder to get, even with excellent credit. For gas station owners, because of industry concerns, like environmental concerns and fluctuating gas prices, it becomes even more difficult. You may need up to 30%+ down, the business to be purchased needs to be VERY healthy financially; and you’ll have to put up sizable collateral, most likely your house and/or real estate investments.
Getting financing for your gas station business doesn’t have to drain all your personal assets or take up a lot of time waiting for the bank to call. PHD Financial may place you with a bridge loan so you could have funding in as little as 2 weeks. These types of loans can be helpful when other financing options are not attainable initially for the new-build or purchase, however, once the business has a more established track-record, PHD Financial will help you refinance into a more traditional loan product.