Gas Station Financing: Thinking Outside the Bank

It can be difficult for certain types of businesses to get the financing they need. Gas stations in particular tend to face troubles, especially those that do not come from any reputable brands. In order to attain gas station financing, business owners may need to look in other places outside of traditional banks.

First, it is important to understand why gas stations are viewed as such a risk for banks. One reason is that these businesses tend to deal in mostly cash. Customers pay for gas with cash, and since cash is readily on hand, business purchases are made with that money. With this, it can be difficult to establish any kind of paper trail to prove your business is viable. Additionally, if a gas station fails, then there really is not anything for the lender to gain to recoup any losses. It is not like the bank can acquire excess inventory to sell off and try to get back its money.

Despite these obstacles, it is not impossible to get gas station financing. It simply requires a little finesse. Small business owners operating a gas station can turn to the Small Business Association to get financing. The SBA has programs available specifically designed for these types of businesses to help them work with banks to get loans. One thing to consider with an SBA loan is the fact that it often takes up to 90 days to get approved.

If the Small Business Association does not seem right for your needs, then you can look toward alternative lenders. These are organizations that are not banks but can still provide you with a loan. A key difference between the two lenders is the fact that banks tend to focus on the perceived risk your company carries while alternative lenders typically look at your company’s likelihood of success. Several benefits stand to be gained. For instance, the application process tends to be a lot simpler, and you will know if you were approved in a shorter amount of time. Something to consider is that these loans usually come with higher interest rates, but the lender is nonetheless dedicated to working with you to pay back the loan.

There is no shortage of lenders willing to work with all kinds of businesses. Obtaining gas station financing does not have to be an ordeal, and you should be aware of what your options are before you open for business. That way you know where to turn to when you require extra funds.


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