Our goal at Lending Valley is to provide all small business owners access to the best loans possible for their business. You can rest assured we will get you the best rates in the market!
Throughout the United States of America, there are approximately 115,000 gas stations which accumulate around $250 billion in revenue. Since they are so important for the whole economy, it is even more necessary to know about what financing options are out there for your gas station.
Due to the nature of your business’s proceedings, you will often need financing to help with covering the costs of your day-to-day operations. Monetary help might be necessary for paying suppliers, working capital, real estate, capital expenditures and much more. The list is endless.
Almost every single person in the United States of America nowadays relies on gas stations. It’s a necessity in our modern society — even when prices rise, people still need to get around.
After the financial crisis in 2008, many American’s have gone back to work which means more and more people are buying fuel again. However, don’t get too excited because gas purchases are predicted to go down in the coming years while everyone starts to think about the environment.
Of course, ups and downs are expected in any industry but, the gas station sector still manages to keep on trucking (pardon the pun) even when a recession is in full swing. As we’ve said, everyone needs to get around, regardless of the times.
While there isn’t top contender that dominates the entire gas station industry, the top 50 tend to bring in over half of the yearly revenue for the whole sector. But unexpected emergencies arrive for everyone which is why gas station owners, like yourself, come here to gain knowledge on all the wonderful financing opportunities available to them.
In this particular industry, fees for credit and debit cards are enormously high. Unfortunately, gas station owners can’t take the credit or debit card option away from their customers since they demand that this be provided. Not everyone carries cash these days, as we’re sure you know.
So, since they are extremely expensive, many gas station financing is used to cover these costs.
Above all, the payroll is the most costly thing in this market sector. Of course, it is an unavoidable cost for anyone who runs a business but that doesn’t mean that each owner can afford to pay it all when business is slow.
Another reason for gas station business loans is the ridiculously high price of upgrading and replacing equipment. Luckily, there are a lot of options out there when it comes time for you to buy new machinery.
While insurance for this type of business is quite expensive, it is a necessity to protect you, your staff and your business’ possessions. Utilizing gas station financing is a great way to avoid having to empty your own pockets up front.
If your company hasn’t yet moved to the social media, mobile use or top of the range tech, it is definitely time to start doing so. Otherwise, you could lose the younger generation who will favour gas stations that meet their digital needs.
Although, we all know this is a pretty costly thing to do and, chances are, you will need a separate company’s help to make that transition. In these cases, you will truly benefit from all the wonderful gas station loans out there.
As your business starts to do well, it is great to start thinking about expanding and renovating. Maybe you want to open up multiple locations in your city? Or perhaps expand your main site? Whatever it is, you already know it’s going to be expensive! Thankfully, the options below will help you out.
Nowadays, everything from shops to the media to people’s home lives is all about going green. So, it makes sense to believe that many gas stations will be following this same trend.
Fuel such as E15 and natural gas (CNG) are fantastic options that you should seriously think about incorporating into your options. But, yet again, these are not cheap which is why having a gas station financing option is the right to go if you are looking to broaden your horizons.
Unfortunately, it won’t be the easiest thing in the world to apply for gas station business loans, but it isn’t impossible. Still, you should keep these potential challenges in mind so you are ready to face them head if they rear their ugly heads.
Since a lot of gas station customers pay in cash, it has hard for you to prove your total income. Cash sales are difficult to document so you will have to rely heavily on your tax returns.
If your gas station’s documents show declining sales, bad cash flow, zero managerial experience or no collateral, traditional banks will no approve your application.
When applying for gas station loans, your credit score (both business and personal) will be checked. If you have suffered any monetary business challenges, this will impact your approval chance.
Traditional banks will offer loans with a 20-year term (usually) which will feature a balloon payment at the halfway mark. This means you will have to refinance the loan before the whole thing is paid off — bringing along another round of closing costs.
If you are a new player in the industry, approval for gas station financing can be near on impossible to gain. Why? Because conventional banks require at least three years of financial data to be given.
Now, don’t fret if you feel like you won’t be able to be approved by traditional banks. We have a lot of gas station financing ideas that you probably haven’t thought of yet.
Trust us, we can help you out!
Traditional bank term loans are sacred to gas station owners like yourself since they offer brilliant rates and low fees. They manage to do this due to the limited risk they take on small business loans.
However, it is really hard to earn approval for these since you have to show 3 years worth of financial documents including:
Not to mention that they require a beyond excellent credit score and history for both you and your business.
A business line of credit is a great gas station financing option that lets you draw on the funds whenever you need to. They can be small amounts to large amounts of money but you have a pretty wide range of what you can ask for in terms of repayment methods.
However, much like traditional bank loans, you will need great personal and business credit as well as 3 years of financial documents.
SBA (Small Business Administration) loans can give you really affordable rates with the best terms of all commercial loans.
These SBA Loans are a fantastic gas station business loan option because the repayments are much less expensive than your traditional bank loans and business line of credits.
If you have a low (or no) credit score or lack certain documents, a mid prime alternative business loan may be the one for you.
They have mostly reasonable rates but the biggest advantage is their turn around time for approvals. Usually, it will only take around a week to have access to your funding. Plus, the likelihood of you being approved is much higher than with conventional lenders, especially if you are a new player in the industry.
Merchant cash advances are not loans but are still a good gas station financing opportunity. The lender will give you a lump sum in exchange for a percentage (stated in your specific terms) of your bank deposits. Typically, you will be expected to repay this every day so if you aren’t comfortable with this, think about one of the other options.
These lenders are comfortable taking big risks which is why you are almost guaranteed to be approved by them. However, you will suffer higher interest rates because of this.
As we discussed earlier, equipment replacement or upgrades can be pricey. So, lenders have developed an option which helps combat this particular struggle. Not to mention that you don’t have to deal with maintenance or repairs this way either.
The lender will buy the equipment you need upfront and then give you the opportunity to lease it from them. Then, once the repayment period is over, you can choose to buy the machinery from them.
The gas station industry is such a lucrative business that you need to stay on top of your game before your competitors take over. With gas station business loans, now you can.
