Gas Station Loans & Financing: Do You Qualify?
Your Guide to Gas Station Loans and Financing
Best Financing and Loan Options for Gas Stations
Gas Station Equipment Loans
Where to Find Gas Station Loans
What You Need to Apply for Gas Station Financing
Working to grow your gas station business? Whether you’re looking to buy an existing gas station, obtain new equipment, refinance existing debt or get working capital, there are gas station financing options for you.
There are several types of commercial gas station loans and financing options. Review the details of some top funding solutions and determine which one is best for your business.
If you’re searching for a business loan for your gas station, consider a term loan. Once you’re approved for a term loan, you get a lump sum of funds. Business term loans range from short term to long term, and there are often no limits on the use of funds. Short term loans are meant to be repaid in about a year or less. Loans with longer repayment terms of 1-5 years or more are also available.
Gas station financing rates will depend on factors such as your gas station’s time in business, your yearly revenue and your credit score. However, longer term loans typically have lower rates than short term loans.
Revolving business lines of credit can provide your business access to funds when you need them and allow your credit line to be replenished as you pay down your debt. You could obtain a cash advance without a fee.
Plus, you pay interest only on the amount you borrow, when you borrow it. Additionally, business lines of credit can be unsecured, meaning you don’t have to offer collateral to be approved for financing. However, this might mean higher interest rates than a secured line and a smaller credit line amount.
If you’re looking to secure an SBA loan for your gas station, you’re in luck. The Small Business Administration (SBA) offers several funding products. If you’ve been denied for gas station financing with a conventional bank, you might find an SBA-insured loan a viable alternative. Why?
The SBA partners with lenders to guarantee a percentage of each loan, so lenders are less at risk of losing out if a borrower defaults. The maximum maturity of SBA loans is 10 years for equipment and working capital, and 25 years for real estate.
If you’re looking for a loan to buy a gas station, consider the SBA 7(a). Borrowers can be approved for loans up to $5 million, and funds can be used for various purposes, including to:
Construct a commercial building
Make improvements to a leased property
Maximum gas station variable loan rates you’ll see with the 7(a) range from a base rate plus 2.25% to a base rate plus 4.75%, depending on the loan amount and repayment term. The base rate could be tied to the Prime Rate, which as of late October 2019 was 4.75%.
If your funding requirements don’t exceed $350,000 and you need fairly fast access to financing, an SBA Express loan might be the way to go. While interest rates might be higher, you could receive an answer from your lender within 3 days, and funding in 30 days. Repayment terms are either 5 or 10 years. Maximum interest rates for SBA Express loans range from Prime plus 4.5% to Prime plus 6.5%, depending on the total amount of the business loan for your gas station.
SBA 504/CDC
The SBA’s 504 loans are offered in conjunction with certified development companies (CDCs). How does it work? The borrower offers a down payment of at least 10%. A lender finances up to 50% of the project, and the CDC funds up to 40% (which is insured by the SBA, up to their maximum allowable limits). Loan amounts are unlimited. Repayment is either made in 10 or 20 years. Time to funding ranges from 60-180 days. While you can’t use funds for working capital, you can buy, renovate or build facilities, refinance certain debt and acquire machinery.
Independent Gas Stations in the U.S.
According to a December 2018 survey by the National Association of Convenience Stores (NACS), roughly 62% of U.S. gas stations with convenience stores operate as independent businesses. Small business owners in the fuel industry often require an influx of cash to grow their business or get through low-performing times of the year, perhaps when gas costs rise.
If you need funding just to obtain new equipment, consider equipment financing, which can be used to lease or purchase machinery. Equipment financing products are secured by the equipment you’re purchasing. As a result, this type of financing is considered less of a risk than a loan that’s unsecured.
Rates range depending on various factors, such as the lender, type and age of equipment and financing product. However, you might find gas station financing rates for equipment loans ranging from 8% to more than 20%.
Use equipment financing to purchase the following for your filling station:
Gas station loans are available through banks as well as non-bank lenders. It’s widely stated, however, that obtaining gas station financing through conventional banks can be challenging. This is due to environmental concerns associated with filling stations as well as the lack of ability to accurately track cash flow due to the high cash-transaction nature of the business. As a result, you might have an easier time getting financing with an alternative lender.
Once you find a commercial gas station loan that interests you, estimate your monthly payments and total cost of financing by using a gas station loan calculator. With an online loan repayment calculator, simply input your loan amount, estimated interest rate and anticipated loan term. Use this tool to compare lender terms and see how much of a gas station loan you can afford.
Requirements vary by lender, so it’s important to know how to qualify for gas station financing. With Fast Capital 360, you’ll need the following qualifications and documentation to get started:
FICO Score 500 +
What You’ll Need to Provide to Apply
Your 4 most recent monthly bank statements
Ready to increase your gas station business’s working capital? With our easy and secure application, you can:
With Fast Capital 360, you won’t spend hours completing your application like you might with a conventional bank. Instead, you can complete our secure online application in less than 5 minutes.
We partner with lending partners throughout the U.S. As a result, you could get several loan offers in less than 24 hours. Consider your options and choose a loan that’s right for you.
Getting capital for your business can be a challenging process. However, once you apply with Fast Capital 360, you’ll have a dedicated Business Advisor at the ready to help you every step of the way. Your advisor will discuss your loan terms with you so you can make an informed decision.