Financing possibilities for convenience stores and gas stations

Jessica SarterSmall Business Lending

No matter what type of venture you’re looking to start up or keep in business, it’s important to know how you can get the financing you need. If you’re interested in finding capital for a convenience store or a gas station, you’ll need to learn about certain franchise financing and small business loan opportunities and requirements related to these industries.

Current (or hopeful) convenience store owners should check out the Healthy Food Financing Initiative
In February 2010, President Barack Obama’s administration announced the beginning of the Healthy Food Financing Initiative. It includes programs supporting private-sector and nonprofit lenders who offer financing to grocery and convenience stores that sell healthy and nutritious foods in economically distressed communities.

Granted, these programs won’t be available for all convenience store entrepreneurs, but should be considered by those who are eligible. Since government agencies offer participating lenders financial assistance and tax credits for getting involved in the programs, both you and your lender come out positively. You can find out if your community qualifies by visiting the website of the U.S. Department of Agriculture.

Check with your franchise
If you’re looking to start a convenience store or gas station under the banner of an established franchise business – such as 7-Eleven or Mobil, to name just two examples – the franchise itself may be able to provide you with financial assistance.

Some franchises offer financing directly. More frequently, they’ll help you contact preferred lenders with whom they have long-standing business relationships to get you the small business loans you need.

Financing processes for gas stations
Conventional loans for gas stations may involve lower interest rates than SBA-backed loans, but you might have more difficulty qualifying. Terms and amortization are typically shorter, and lenders may want you to bring more working capital to the table than would be necessary for a 7(a) loan, as the bank or financial institution giving you the money is assuming the most risk.

Getting an SBA-guaranteed loan for a gas station has its own specific requirements as well. You’ll need to meet the agency’s size standards (the majority of U.S. businesses do), and prior experience in running a gas station or similar business is often preferred, if not always required. Contact the SBA or a lender offering its loan programs to learn the full list of requirements.