Financing gas stations, convenience stores and truck stops can
be financially very rewarding. Many people in commercial financing avoid this asset class
altogether because of the perceived inherent difficulties that it poses, namely being a cash business and the
perception exists of significant environmental risks. As a result of it being more difficult to finance as
opposed to multifamily, office buildings, warehouses and other types of commercial properties, the need for
knowledge and professionalism is even more important.
First of all, who is
PetroMAC? PetroMAC has corresponding relationships on a conventional
basis and brokers SBA transactions. Brokers and borrowers can not approach most of
our conventional sources directly. Borrowers will normally not see a commission fee agreement from PetroMAC, as
normally would be present in a loan originated by a broker. We function as a retail outlet for some
well known banks, lenders and hedge funds. On an SBA basis, we frequently get deals approved that others have
not because of our understanding of the industry and our ability to uncover cash flow. Your
borrower will not pay more for your loan by dealing with PetroMAC. We do not operate in opulent offices
or operate out of a central location. Our processors operate from a centralized location but loan
officers and underwriters operate all over the country from the comfort of their own home, much as Account
Executives and Business Development Officers do for SBA lenders and many banks. We try to stay ahead of the
curve on a technological basis so that we can disseminate information from transactions almost instantly to
loan officers, processors and underwriters.
How will I be paid on a
transaction? Most conventional lenders do not pay a referral fee for a
gas station or convenience store loan. It might be standard to have a referral fee or yield spread on
multifamily, office buildings or all sorts of other commercial properties, but this is not the case with C
& G (convenience and gas). We do not have yield spread on either SBA or conventional (conventional
being defined as any loan that is not government backed such as SBA 7(a), 504 or Rural Development B&I
loans)loans. It is important that you have a fee agreement with your borrower. Because there really are not
usury laws for commercial loans, many brokers charge in our opinion inappropriate fees. Many
underwriters will immediately kill a deal if they deem fees to be excessive. We usually can collect a
point at the table on our stated and interim/bridge loan program. If you are charging more than a point,
you will need to collect that outside closing. Exceptions to this are high LTV loans (95 - 100%) where
the borrower has little to no equity to put into the deal. The logic is, if a borrower has no money to
purchase a station, they have no money to pay a broker. In these cases, borrowers would need to pay the
broker outside of closing or with a side agreement. On SBA loans, we usually can pay the broker a 1%
referral fee. Of most important is communication on each transaction so there is no ambiguity or
unrealistic expectations. We want you to be successful in the transaction, because your success
dictates our success.
Does PetroMAC have to deal with my
borrower? The answer to this is an emphatic YES. There is a
HIGH ratio of failure with loans where we do not speak to the borrower. As a matter of fact, we will
always speak with the borrower. If the broker will not allow ut to deal with the borrower directly, we
will not be interested in the transaction. If it makes you more comfortable to speak with us on a conference
call with your borrower, that is quite accceptable. We have the ability to sell the deal better and we
usually can get answers quicker and undiluted. We have no control as to what a broker tells a borrower and in
many cases, misrepresentations have been made just so the broker could get the deal from the
I don't know ANYTHING about lending to gas stations and
convenience stores. Can you help me? To quote Vidal Sassoon, "If you don't look good, WE don't
look good." Your professionalism (or lack thereof) will reflect back to us. In an effort to help you
understand the C & G industry AND commercial financing for this asset class, we have created written and
audio training information at pages.asp?cmd=training .
How long does it take to get a deal
approved? Many times brokers tell us they have a "complete
package." We have found that that is accurate maybe one in twenty times. On the short term/bridge
and stated income programs, it usually takes a week to obtain a commitment letter. On SBA and conventional
loans, normally around fourteen business days, but this is only
after receipt of all requested information. The clock does
not start simply because we have issued a Letter Of Interest. It is also important that you convey this to
the borrower and to keep expectations realistic. Transactions where borrowers own multiple companies
will obviously take somewhat longer.
How can we speed up the approval
process? By keeping all documentation in an organized, sequential
and labeled fashion, it will help us by reducing the time we have to spend organizing the file.
Particularly, if you can indicate the structure of what tax return belongs to seller or
buyer will help facilitate this process.
What do I need to do to pre-qualify my borrower to see if it's a
deal PetroMAC would like to consider?In order to pre-qualify loans faster, we have found that
providing a certain amount of information up front helps us expedite the underwriting of a loan. If you
can provide us with the following information, it would help us a great deal. You can click the blue
underlined links and find the form on the PetroMAC web site.
Please refer to the FREQUENTLY ASKED
QUESTIONS for additional questions on financing and about
After we have pre-qualified a transaction,
this is the document checklist that we go by usually when doing purchase financing. Exceptions to this
checklist is when the seller is an oil company or fuel supplier where full financials will not be available
or also closed or auction sites. Please inquire if this situation applies. All
forms are available here on the PetroMAC website. This information should be faxed to (202) 478-1811 or
emailed to firstname.lastname@example.org.
this page and click this link to listen to the audio about properly submitting for prequalifying and for full
We hope that this answers most of your questions. We look forward to working with you. We would
strongly encourage oyu to browse through the website as there is a wealth of information about the C & G
industry and about commercial financing for this industry.
For more information or to inquire about other financing programs
for gas stations and convenience stores, call: