Found A Gas Station For Sale And
Need A Loan? Who Even Does Gas Station Financing? Part II
Banks in general do not like to lend to gas stations and convenience stores. I will repeat.
Banks in general do not like to lend to gas stations and convenience stores.
Because banks do not like to lend to this asset class and many that lend do on a limited basis,
another option is to use a mortgage broker.
There are different types of mortgage brokers, but to generalize, there are those that do
residential lending and there are those that do commercial lending and there are those that do both.
Unless the person you are dealing with is VERY sharp, you probably should avoid
mortgage brokers that mostly do residential lending. The reasons for this should be obvious. They probably
are going to know very little about commercial lending and even less about the petroleum business. If you are
buying a gas station and have ninety days to close your deal, you don't have 30-45 days for a residential
mortgage broker to learn about commercial lending, find a lender through whoever their sources are AND also learn
about the gas station and convenience store industry. Some mortgage brokers might also be correspondent
lenders (which basically means they have someone else's money to lend and close in their own name), but this does
not make that more attractive because the company they correspond for probably does not lend to gas stations and
convenience stores either.
A smarter way to go would be to deal with companies that ONLY do commercial financing. The only
problem with this is many tend to specialize in doing certain types of transactions, such as apartment building
purchase, construction, restaurants, or whatever their area of specialty is.
Question Number 1 you should ask ANY mortgage broker is, have you ever DONE a gas station
loan? When was the last time you did one? How many have you done? Just because they might have done quite
a few hotels, restaurants, apartment buildings or whatever, the same problem exists in that they still have to find
lenders and they still have to learn a certain amount about YOUR business.
Again, you should probably ask them questions about what they know about the business? Do they
know what a jobber is? Do they know what rack price or pool margin is? Do they know how fuel is distributed in this
country? Do they know the difference between an operator, a dealer and a jobber?
If it all possible, you should deal with mortgage brokers, banks and lenders that either
specialize in this asset class or have done quite a few of these transactions. With the credit markets tightening,
it is even more important to find someone that knows the business.
Many banks and lenders (and even mortgage brokers that specialize in commercial) avoid financing
gas stations and convenience stores like the plague. There is a reason for this. They are a lot tougher to do, so
you definitely want to align yourself with an entity that is professional, knowledgeable about the business and can
get your transaction done.
Harold Jaynes is with PetroMAC, one of the premier sources of financing gas stations,
convenience stores and truck stops in the US. They have specialized in this asset class since 1999. Come learn from
the professionals. Visit our site at http://petromac.com (voted one of the top 100 mortgage sites in America) and contact us for more
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