President Obama Open The Sba For Gas Station Financing

By Author: John Schnieder
Total Articles: 70
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3/16/09: President Obama today enhanced the SBA for funding small businesses and liberalized the restrictions that have been imposed for the last year, in an effort to stimulate the economy. Gas station owners are now encouraged to contact a professional lender that knows the gas station business and is working with lenders that understand the gas station business.
If you're looking to buy a gas station, convenience store or truck stop then you're probably looking for a gas station loan. Better go find yourself a bottle of aspirin. up to this point, it has been hard to find anyone who is willing to even talk about gas stations. It's the same thing with convenience store financing or truck stop financing. Make no bones about it, if you've found a gas station or convenience store for sale, getting a gas station loan has been a pain. Financing these types of properties and businesses has presented a challenge for years in the traditional commercial financing arena. Banks generally have an aversion to financing them for numerous reasons, although your local bank might very well have the best deal for you.(but that's also assuming ...
... that they will do it..) Your best deal will almost always be your local bank because you'll have a depository relationship with them (but NEWS FLASH.... they're probably not going to do your deal!) UNLESS... you talk to the right lenders.

Oh yeah, how about the price of fuel these days! Declining gallonage...declining pool margins...better deal with someone that knows the industry!
Banks in general do not like to finance gas stations and convenience stores for the following reasons:

* Petroleum retail is a cash business and verifying cash flow is more difficult than other commercial income producing properties such as apartment buildings and office buildings.
* Petroleum retail has perceived environmental risks that are not present in many other types of commercial properties. It is much easier to evaluate a loan where there is significantly less perceived environmental risk.
* Gas stations and convenience stores pose a larger problem for lenders if properties are ever foreclosed on. In the case of many income producing properties, at a minimum the lending institution can inspect the rent roll and continue collecting rents until a suitable buyer is found. Banks do not step in and run a gas stations and convenience stores in the case of default.
* Let's not forget to add that gasoline fuel margins have been their lowest in years due to ever increasing number of hypermarts and big box retailers who do not care about fuel margins, but only to bring people in their door. Read the paper lately and looked at the price of a barrel of oil too?

It's no wonder you get a quick 'no' from your local bank.

Sounds discouraging for the average borrower, but for those with the right connections, business opportunities are right around the corner. It just takes stepping outside the box. Many think that SBA loans are very time consuming, but again, with the right people on your side, SBA loans can close in less than a month in many cases.
Kendall Schnieder works with preferred SBA lenders in the Western US and specializes in commercial real estate loans. He can be contacted at http://www.mark4Capital.com or 530-227-0203