Gas Station Financing Is a Challenge! No comments yet

If you’re wondering about obtaining financing for the purchase of a gas station or refinancing the one you already own, here’s some information on the current lending markeplace that might be helpful for you to know.  First, many lenders that use to make these loans have stopped doing them altogether.  I know that’s not good news but the fact is that it has become increasingly harder to find this financing.  Lenders just don’t want the risk that comes along with this type of property. The fluctuation of gas station prices which affects the station’s revenue and the ever changing habits of the driving population are some issues not to mention contamination that is always possible.

Second, the SBA (Small Business Administration) no longer will make these loans unless the seller (usually a brand company) is willing to sign a guarantee to be responsible for any damages resulting from contamination that could occur.  The brand companies are not willing to accept this responsibility.  Certainly, independent sellers aren’t willing to do this either.

However, notwithstanding these facts, there are lenders that are willing and able to make loans to gas station buyers and owners.  The guidelines for these loans tend to be be loan amounts of 60% to 70% of the purchase price or that same percentage of the value of the station in the case of refinancing gas stations already under ownership. Interest rates for these loans range between 8% and 9% at this time.

If a station is contaminated, most lenders won’t even consider undertaking a loan for that situation.  However, Lending Resources Group does have access to lenders that will underwrite those types of stations.

Lending Resources is currently working with several gas station owners and purchasers to help them conclude their financing requirements for their purchases as well as their refinancing needs.