Best Gas Station Business Loans - Features Comparisons
Company
|
Min. Credit Score
|
Min. Time in Business
|
Min. Annual Revenue
|
Loan Amount
|
Interest Rate
|
Credibly
|
Not disclosed
|
Not disclosed
|
Not disclosed
|
$150,000 - $5,000,000
|
8% to 25%
|
Fora Financial
|
500
|
6 months
|
$12,000
|
$5,000-$500,000
|
Not disclosed
|
Biz2Credit
|
575
|
18 months
|
$250,000
|
$25,000- $2 million
|
Not disclosed
|
BlueVine
|
600
|
6 months
|
$120,000
|
$5,000-$250,000
|
Starts at 4.8%
|
National Funding
|
500
|
12 months
|
$100,000
|
Up to $150,000
|
Not disclosed
|
SmartBiz
|
640
|
2 years
|
Not disclosed
|
$30,000 to $5 million
|
4.75% - 7%
|
What are the costs of running a gas station?
Opening a gas station comes with a high financial barrier to entry. At a minimum, you should secure $300,000 in financing to get your venture up and running. The funds will need to be used to buy the location, business insurance, registration, licenses and permits, marketing materials, gas, payroll and more.
The ongoing costs of your gas station will include utilities, payroll, and inventory. You’ll likely pay anywhere from $50 to $70 per 20-gallon barrel of fuel. Of course, this figure can easily increase depending on the environment. In addition, you may be on the hook for franchise royalties and fees.
Types of loans available to gas station owners
There are a number of loans you can take out as a gas station owner, including:
- Lines of Credit: A business line of credit works a lot like a credit card: you can withdraw as much or as little as you’d like up to a set credit limit.
- SBA Loans: SBA loans come with low interest rates and long repayment terms.The SBA 7(a) loan is ideal if you’d like to buy or expand your gas station as you may get approved for up to $5 million.
- Equipment Loans: If you need funding to purchase or lease new or used equipment for your gas station, equipment financing can help you out.
- Merchant Cash Advance: A merchant cash advance can be a smart choice if your gas station has a high volume of credit card sales.
- Term Loans: Term loans provide you with a lump sum of money upfront that you repay over time via fixed monthly payments or installments.
How to use gas station loans?
The most common uses for gas station loans are as follows:
- Working Capital: Working capital refers to the ongoing, day-to-day expenses you may incur to run your gas station. Some examples include rent, utilities, payroll, insurance, fuel, and maintenance.
- Expansion: If you own one successful gas station, you might want to expand your business. With some help from a loan, you can move to a larger location, open additional gas stations, buy a gas station that already exists, and hire additional employees.
- Inventory: If your gas station sells convenience products like snacks and drinks in addition to gas, a loan can ensure you always have enough inventory at your disposal. Just make sure you do some research and find out exactly how much inventory you need.
- Upgrade Equipment: It’s important to keep your storage tanks, fueling systems, point-of-sale systems, and other equipment up-to-date. A gas station loan can help you do just that.
- Emergencies: Since emergency expenses are bound to pop up when you least expect them, a gas station loan is a great way to gain some peace of mind.
How to Qualify for a gas station business loan?
To increase your chances of getting approved for a gas station loan, be sure to:
- Check Your Credit: Make sure you know where you stand credit wise. Visit AnnualCreditReport.com to pull free copies of your reports from Equifax, Experian, and TransUnion. Dispute any errors or inaccuracies you find as they may bring down your credit score.
- Solidify Your Business Plan: Most lenders will ask to see your business plan so they can learn more about your gas station and find out what you plan to do with the loan proceeds. Do your best to provide them with a plan that’s clear, compelling, and professional.
- Shop Around: Not all gas station loans are created equal. That’s why you should do some research and only apply to options with qualification requirements that you meet. There’s no point in applying for a loan that requires good credit if your credit is fair or poor.
- Develop Relationships with Lenders: Sometimes, it’s all about who you know. Take the time to build relationships with lenders long before you apply for their gas station loans.
How to apply for a gas station loan?
Here are some tips to keep in mind when you apply for a gas station loan.
Gather Financial Documents
In most cases, lenders will want to see a variety of financial documents, such as:
Recent balance sheets
Tax returns from the past few years
Profit and loss statements from the last three years
Escrow directions, including closing date and escrow agent contact details
Details of any assets involved in the loans, such as equipment or receivables
Find the Right Loan
To start your search for the best gas station loan, visit our list of the best gas station loans above. Explore each lender’s website and don’t hesitate to contact them directly if you have any questions or something doesn’t make sense. Once you compare rates, terms, fees, and perks, you’ll be able to choose the right one.
Fill Out the Application
Most lenders will allow you to apply for a gas station loan online. While a merchant cash advance comes with a quick, easy application process, applying for an SBA loan, for example, will take more time. Before you submit any application, double check your work for errors to avoid delays with approval and funding.
Closing Thoughts
Opening a gas station can be an exciting, lucrative venture. After all, gas stations are always in demand. As long as you have sufficient capital at your disposal, you can succeed, especially if you earn additional revenue from convenience store items, car washes, and other extras.