PETROMAC - We Pump Capital Into YOUR C-Store
 
 

 

What's The Best Way To Obtain Gas Station Construction Loans? Is Gas Station Construction Financing Even Available?

 

When looking to do construction financing, be it a ground or a raze and rebuild, your banker will probably not be as excited about your project as you will be. Regardless of what a great piece of land you might own or there isn't any competition for fifty miles or the company you've retained to do a feasibility study has given you all positive indications, a lender is still going to consider it a start-up…because it is.

Lenders will certainly have preferences on doing construction loans. In reality, almost all types of financing can work, be it SBA 7(a) or 504, conventional or even private financing.

  • Lenders prefer borrowers who currently own gas stations / convenience stores over those who do not
  • Lenders prefer projects where the land is currently paid for instead of land where there is a note or yet to be purchased
  • Lenders prefer projects where everything has been priced out by a reputable contractor as opposed to where they are simply using a square foot multiple
  • Lenders prefer projects where permis have been applied for and approved over projects where this has not been done.
  • Lenders prefer projects where there are additional income streams, i.e. additional business or salaries as additional sources of borrower revenue while a site is being constructed
  • Lenders prefer projects where there have been feasibility studies done by a reputable company over ones that do not have them.  Traffic counts and fuel projections by a fuel supplier are helpful but are not "arms length" and are insufficient.
  • Lenders prefer projects where the borrowers have a business plan (not computer generated) as opposed to those who do not.
  • Lenders prefer projects where site plans have been drawn up as opposed to projects which haven't.

If you have not owned or managed a gas station or convenience store and have yet to purchase the land for the transaction, your request will probably fall on deaf ears for the most part. Construction financing is a process that usually takes a long time to begin with. If you really have not started the process, most lenders will not be interested in even talking unless the loan amount is small.

Two big fears that lenders with construction loans are:

Cost Overruns
Construction Not Being Completed Due To Unforeseen Factors

Lenders will almost always factor in a contingency during the construction phase, usually 10%. If you do not have this factored in your costs, be prepared to do so. Depending on the area where you live, construction can be halted in winter due to bad weather. Construction can be halted due to not having all necessary permits. We have frequently had borrowers approach us for unfinished projects. Perhaps a bank approved a certain loan amount and there were cost overruns and the bank would not lend anymore. The borrower is still making interest payments with an unfinished building and a grumpy banker and borrower. Nobody wins here.

Whether there are two separate loans, or a construction loan that turns into a permanent loan, do not be misled about the loan-to-value (LTV) that banks represent they will do. Usually SBA will offer a higher advance than a conventional loan, but because banks want to be fully collateralized, it really ends up being in the 70-75% range max. The reasons why is this:

Banks discount collateral in the following manner. Land, building and improvements are usually discounted by 20-25%, depending on the lender and machinery / equipment are usually discounted by 50%. Since there will be no good will at the completion of the project, the bank will not discount it (usually the discount is 90-100% and no value is given) Let's say the appraisal comes back of $2,000,000 "as completed" or "as built", of which $1,700,000 might be real estate/building and $300,000 of equipment. At a minimum the land and building will be discounted 20% and the machinery and equipment will be discounted 50%.

This means the actual collateral value of the site is $1,510,000 ($1,700,000 X .8 = $1,360,000 + $300,000 X .5 = $150,000. $1,360,000 + $150,000 = $1,510,000) It's even lower if the discount rate is 25% on land and building instead of 20%. If the bank is lending you 80% of $2,000,000 ($1,600,000) you guessed it, you are undercollateralized. This means the bank will be looking for an additional $90,000 in collateral. Does this mean they will turn you down, not necessarily, but the chances are significantly higher that they will.

Don't assume that because you have a $2,000,000 that this will satisfy them. It won't.

In summation:

Have Your Homework Done Prior To Calling A Lender
Have Plans Drawn Up As Opposed To A Vague Idea Of The Building
Do A Professional Business Plan
Know If You Will Be Branded, What Brand And Know Who Will Supply You
Have A Good Bid From A Contractor
Try To Use Contractors That Have Built Many Gas Stations
Contact Local City/County Offices About The Permit Process
Have A Feasibility Study Done If Possible

PetroMAC has done many gas station, convenience store and truck stop loans and can assist you in ALL phases of the project, as well as negotiating with vendors and suppliers.

Click here to find out the documentation you will need for a construction loan.

Click the financing tab above to find different financing options for your project.

To prequalify for financing, download the following forms and provide the following information and fax to (202) 478-1811 or email to info@petromac.com:

  1. PetroMAC Loan Request Form (You can also submit online here)
  2. Completed Tri-Merged Credit Report or Credit Authorization
  3. Business Plan

So what are you waiting for? You can convenienently apply online for a loan here or download the prequalification form here.  First time inquiries should inquire at info@petromac.com.  Let us prove to you that PetroMAC truly "pumps capital into YOUR C-store."

 

 

 
Loan Submission

 Process

Gas Station Convenience Store Loan Submission

Click Image To Learn About The Loan Submission Process

 

 
    Mortgage Brokers
 

Click Here

 

 

Gas Station Loans Mortgage Brokers

 

 

 

 

 

 

 



 Oil Company Websites

ExxonMobil

Shell

BP

ARCO

Chevron

Phillips 66

Conoco

Valero

Citgo

Sunoco

Hess

Marathon

  

 

 

Gas Station Construction Financing Loans

 

Truck Stop Loans Financing

 

Petroleum Jobber Financing

 

 

Why Use PetroMAC

 

 Fixed Rate Financing For Gas Stations

 

Frequently Asked Questions - FAQ

 

Apply Online For Gas Station Financing

 

Contact PetroMAC

 

 

 

  

 

 

Low Fixed Rate Financing

 

 

 

 

 


NEW 4.5%
FIXED RATE FINANCING
For more info email
info@petromac.com

Gas Station Pre-Qualifying

Click Image To View A Short Video On How To Pre-Qualify For Financing

I don’t have time to read all of this! I just want to apply for a loan! Please click here

Read here the most
Frequently Asked Questions about
obtaining financing

Find out why gas station and convenience store appraisals are different than other commercial properties from Joe Anderson at PetroVAL



What Type Of Financing Is Right For You Or Your Client?
Click Here To Find Out!

Want some cool gas station stuff? Sign Up below:

CONTACT US:
(202)478-0230

info@petromac.com

 Learn Everything You Needed To Know About Environmentals But Didn't Want To Ask!

 

Listen To Tony Amato About What You Should Look For When Purchasing A Gas Station Or Convenience Store.

 

Listen To Industry Veteran Bobby Stanton About What You Can Do To Make Your Store More Profitable.

 

Learn The Good, The Bad And The Ugly About SBA Financing

 

I Really Prefer Conventional Financing.  Is It Better Than SBA Or Less Expensive?

 

Can I Get Private Or Hard Money Financing? Is It Rate And Fee Prohibitive?

 

Is Business Only Financing Availalble? What Are The Criteria?

 

What Documentation Is Normally Necessary For Traditional Financing?

 

Can You Get Gas Station / Convenience Store Financing If You Don't Have Great Credit?

 

Presentation Is Half The Battle In Getting A Loan Approved.  We're Not Mind Readers!

 

Why Does It Take SO LONG To Be Approved At Times?

 

 What Is Global Debt Service Coverage And How Does It Relate To You If You Have Multiple Businesses

 

What Is The Difference Between Loan-To-Value (LTV) and Loan-To-Cost? This Is A MUST Know!

 

Can You Have A Seller Held Second? What Makes Them Attractive And Unattractive

 

Don't Forget Closing Costs, Working Capital And Inventory Or Your Deal Might Not Be Approved!

 

Can Lenders REALLY Make The High Loan-To-Value (LTV) Loans They Claim They Can?

 

Find Out How Much You Know About The Petroleum Business And If You Pass

What Type Of Financing Is Right For You Or Your Business?

 Discount Electricity

Click Image Above To Learn About Discount Electricity For Dealers And Their Customers!

Car Wash Loans

 

Click Here For Gas Station Realtors

 

Click Here For Gas Station Appraisers

 

Click Here For Environmental Companies

 

 

 

 

 

 

 

 

 

retro jordans for sale retro jordans for sale coach outlet online sport blue 3s cheap jordan shoes jordan 3 wolf grey Louis Vuitton Outlet coach factory online lebron 12 foamposites for sale Cheap Oakley Sunglasses coach outlet online sport blue 6s louis vuitton outlet louis vuitton outlet wolf grey 3s sport blue 6s louis vuitton outlet louis vuitton outlet retro jordans for sale