Gas Station Loans
We are pleased to offer gas station loans for the purchase or refinance of gas station properties nationwide. Select Commercial specializes in gas station financing for both seasoned operators and new owners. Whether you are starting a new business, or expanding an existing business, obtaining the right gas station financing is almost as important as finding the right location for your gas station. Many new owners underestimate the amount of capital needed to open and run a successful gas station operation. Here are some of the typical costs that Select Commercial is able to finance: acquisition of the real estate and the business, furniture, fixtures, and equipment (FF+E), closing costs, working capital, and rehab/improvements. There are many costs involved in purchasing or expanding a gas station and obtaining the right gas station loan is crucial.
There are three main sources of gas station loans: the US Small Business Administration (SBA loans), which include 7(a) and 504 loans, seller financing, and conventional bank loans. Most conventional lenders tend to steer clear of gas station loans due to the risk profile of the real estate and the business. Many gas stations are sold using seller financing, but these loans are often short-term loans that need to be refinanced rather quickly. The overwhelming source for gas stations loans today is the Small Business Administration’s SBA loan program. These gas station loans allow financing up to 90% LTV and offer terms as long as 25 years. These loans are easier to obtain than traditional bank financing because the SBA offers its guarantee to the lender in the event of default. This allows lenders to make riskier loans that conventional lenders might otherwise avoid. As an example, the SBA 7(a) program allows for loan sizes up to $5 million – enough for even the largest gas stations. Further, since the SBA program is intended to finance small businesses, the proceeds of a gas station loan through the SBA can be used to purchase the business, as well as, the real estate. Most conventional gas station lenders will only finance the real estate.
Many existing small business owners looking to refinance their loans, or obtain additional cash out, often find that they have trouble obtaining traditional bank loans due to their company’s size, specialized property type, credit rating, or difficulty producing tax returns. If you are starting up a new business or expanding an existing business, it may be possible for us to use projection-based income in order to qualify. Traditional banks can’t match the ability we have to “stretch the guidelines” to help your business grow. These loans have always been a large portion of our business. We actively lend on car washes, gas stations, restaurants, hotels and motels, bed and breakfasts, laundromats, service stations, bowling alleys, movie theaters, golf courses, marinas, retail stores, independent groceries, franchises, auto repair, manufacturing plants, liquor stores, health clubs, self-storage, mini-storage, parking garages, campgrounds, recreational facilities, RV parks, and many other single purpose properties. Let us help you start, purchase, refinance or grow your business! Our minimum loan size is $1,500,000.
It is important to choose a lender that has experience making gas station loans and understands how to analyze these transactions. Call us today to discuss your gas station loan request!
Our Commercial Real Estate Loan Benefits
• Commercial real estate loans for gas stations
• No upfront application or processing fees
• Simplified application process
• Up to 75% LTV, 90% with SBA
• Terms and amortizations up to 25 years
• Loans for purchase and refinance, including cash-out
• 24 hour written pre-approvals with no cost and no obligation
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Gas Station Loan Outlook for 2024
The real estate market has undergone significant changes in recent years, and the outlook for gas station loans in 2024 is influenced by a variety of factors including economic conditions, consumer behavior, and advancements in technology. As we look ahead to 2024, investors and lenders are focusing on stability and long-term growth potential in the gas station sector.
One of the major trends shaping the gas station market in 2024 is the increasing demand for convenience and accessibility. As consumers continue to prioritize quick and easy access to fuel and other services, gas stations that offer a variety of amenities, including convenience stores and car wash services, are seeing heightened demand. This trend is driven by the overall economic recovery and increased consumer spending.
Commercial mortgage rates for gas station loans in 2024 remain competitive. While interest rates have experienced some fluctuations due to the Federal Reserve's efforts to control inflation, they are still relatively low by historical standards. This favorable rate environment provides opportunities for businesses looking to secure financing for new gas station developments, expansions, or renovations. Lenders are generally optimistic about the gas station market, focusing on businesses that demonstrate strong financial health and growth potential.
The ability to secure attractive financing terms will depend significantly on the location and financial stability of the gas station. Properties in high-traffic areas with a steady stream of customers are more likely to receive favorable loan terms. Conversely, gas stations in less trafficked areas or those still struggling to regain pre-pandemic levels of business may face challenges in obtaining financing.
Technological advancements and the rise of alternative fuels are also influencing the gas station market. Many gas stations are adapting to these changes by incorporating electric vehicle (EV) charging stations and offering alternative fuel options to meet the growing demand from environmentally conscious consumers. Lenders are increasingly looking favorably upon gas stations that embrace these innovations and sustainability practices.
The importance of adaptability in the gas station industry cannot be overstated. Many gas stations have diversified their offerings to include convenience stores, quick-service restaurants, and car wash services to attract a broader customer base. Lenders in 2024 are looking favorably upon businesses that have diversified their revenue streams and demonstrated resilience and innovation in their operations.
Overall, the outlook for gas station loans in 2024 is positive, with continued opportunities for businesses to leverage competitive commercial mortgage rates and reinvest in their facilities. However, careful consideration of market conditions, location, and financial health is essential to maximize the benefits of securing a gas station loan in the coming year.