Finimpact
SBA Loans
Loan Purpose
Various purposes, including gas station financing
Loan Amount
Up to $5 million for the 7(a) loan program and $5.5 million for 504 loans
Down Payment
As low as 10%
Interest Rates
Competitive rates, usually lower than traditional banks
Term Length
Longer repayment terms (up to 25 years for real estate)
Collateral Requirement
Collateral may be required
Credit Score Requirement
Typically need a 680 or better, but varies by lender and loan type
Loan Guarantee
SBA provides a guarantee to lenders, reducing their risk
Application and Closing Timelines
Lengthier applications and more documentation required, closing times often take weeks or months
Small Business Support and Resources
SBA offers counseling, training, and resources for small businesses
Traditional Loans
Loan Purpose
Various purposes, including gas station financing
Loan Amount
Varies based on the bank's lending criteria, often not as high as SBA loans
Down Payment
Typically 20% or more
Interest Rates
Varies based on the bank and borrower's creditworthiness
Term Length
Shorter repayment terms (typically 5-10 years)
Collateral Requirement
Collateral sometimes required
Credit Score Requirement
Minimum credit score requirements vary by lender
Loan Guarantee
No loan guarantee provided
Application and Closing Timelines
Streamlined process, although documentation is still required
Small Business Support and Resources
Limited small business support from the bank

Alternative Financing Options for Gas Stations

While SBA loans are certainly a good option for gas station financing, they’re not the only (or always the best) choice. Here are a few alternate routes to consider:

  • Equipment financing: If you just need equipment for your gas station, equipment financing helps you to finance the purchase or lease of fuel pumps, tanks, POS systems, or convenience store fixtures.
  • Business lines of credit: A revolving line of credit provides access to funds that can be used for various business needs, such as inventory purchases, working capital, or unexpected expenses.
  • Business credit cards: Gas station owners should consider using business credit cards for their day-to-day expenses so they can earn rewards or cash back on eligible purchases.
  • Seller financing: In some cases, gas station sellers may be willing to finance part of the purchase price, giving you the ability to make payments directly to the seller over a specified period, but without the hassle of a full SBA application. 
  • Crowdfunding: Online crowdfunding platforms provide an opportunity to raise funds from a large number of individuals who believe in your gas station business concept.
  • Grants and subsidies: There are government programs and industry-specific associations that may offer grants to gas station owners. 

FAQs

Why is it so difficult to get gas station loans?

Gas stations are considered high-risk businesses with constantly fluctuating revenue streams due to the shifting price of fuel. Any business that deals with this kind of risk is going to make lenders nervous, making them less likely to approve certain applicants.

Additionally, stringent eligibility requirements, such as solid credit scores, detailed financial documentation, and collateral, contribute to the difficulty.

What are the maximum loan amounts for an SBA gas station loan?

The maximum loan amount for an SBA gas station loan depends on the specific SBA loan program you’re working with. The SBA 7(a) program, for example, offers loan amounts of up to $5 million, while the SBA 504 program provides up to $5.5 million for approved projects. The actual loan amount you qualify for will also depend on factors such as your business's financials and creditworthiness.

What repayment terms are available on an SBA loan for a gas station?
How can I find lenders that offer SBA loans for a gas station?

Many lenders offer SBA loans, to find them:

  • Visit the Small Business Administration's official website to access its lender match tool, which connects you with SBA-approved lenders.
  • Contact local banks and financial institutions near you and inquire about their SBA loan programs for gas stations. Community lenders may have more lenient requirements for those in their areas. 
  • Seek recommendations from industry professionals, business advisors, or fellow gas station owners who have successfully obtained SBA loans.
  • Use a reputable loan broker who specializes in SBA loans to access a broader network of lenders.

Resources

  1. Small Business Development Centers (SBDCs): SBDCs provide assistance to small business owners, including guidance on financing options. They offer workshops, one-on-one counseling, and resources to help you navigate the loan application process.
  2. SCORE: SCORE is a nonprofit organization that offers free mentoring services to small business owners. They have a network of experienced mentors who can provide guidance on securing SBA loans and other aspects of starting and running a gas station business.
  3. Gas station business forums: Engaging with online communities can provide valuable insights and advice from fellow gas station owners. Participate in forums such as the Gas Station Forum or Petroleum Equipment Institute (PEI) Forum to connect with experienced professionals. 
  4. Gas station trade associations: Trade associations like the National Association of Convenience Stores (NACS) and the Energy Marketers of America (EMA) can provide industry-specific resources, advocacy, and networking opportunities for gas station owners. 
  5. Industry publications: Stay up-to-date with industry trends and financing opportunities through publications like "Convenience Store News".

About the Author

Christopher Murray

Christopher Murray

Personal Finance Expert

Christopher Murray is a professional personal finance and sustainability writer and editor who enjoys writing about everything from budgeting and saving to unique investing options like SRI and cryptocurrency.

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