Of course, our gas station business plan won’t be complete without the financing aspect which plays a major role in the realization and success of the investment’s profitablity. There are few ways to finance your gas station business purchase. You can always stop by and talk to your local bank that you already bank with and see what their requirements are. You can also contact a local reputable mortgage broker who can find other non-local specialty lenders who specializes in deals such as yours. You can also go to the website for the Small Business Association or SBA, for some information and see which one of their loans you qualify for as they have various loan programs to fit most needs. The SBA is the organization in the United States – a very official one – that works to support the interests of small businesses around the country. As you may already know, small businesses, including the kind of gas station business you are considering, make up an important backbone for the United States economy. Addressing just some of the many challenges that small businesses face, the SBA provides a variety of loans and other supports, including, sometimes, free advise from experienced business professionals (often very well worth it). The SBA can also help you get a handle on the type of loans you may be eligible for as you start to build your gas station business. Once you gather up a few loan application packages (it is always a good idea to apply at more than one lender) it is time to prepare some documents for your loan package.
A typical commercial loan package should include the followings:
A detailed business plan
Your updated resume highlighting relevant business experience
A recent signed personal financial statement (preferably one that has been prepared by a CPA)
Copies of the last 3 years of personal tax returns
A copy of the purchase agreement that you signed with the seller
A current P& L of the business
A projected P& L of the business Most commercial lenders will also ask for some environmental testing reports like Phase I and or Phase II testing of the premises.
It can typically take anywhere from 30 to 90 days from application submission to actually closing on the loan, especially if SBA is involved as generally SBA requires lot more documentation than other banks. One point to note, when you sign a purchase agreement and put earnest money deposit, make sure there is a clause in that agreement that clearly states that the you will only buy the location if you can get “favorable financing from a lender”, this words can also act as an exit strategy in case you want to back out at some point in this process. This way you will get back all your deposit also.
To continue learning more about the details of financing this business read on the post Gas Station Business Plan – Financing Your Purchase Part 2.
Thanks for dropping by again. Let me know your thoughts on this topic of how to buy a gas station business plan and feel free to post any questions below.