PETROMAC - We Pump Capital Into YOUR C-Store
 
 

 

Looking To Buy A Gas Station - Don't Get Mental Over An Environmental

If you're looking to buy a gas station or convenience store, one of the main reasons banks and other lending institutions do not like to lend to this asset class is because of supposed environmental concerns. While it is true that the likelihood of having an environmental issue is greater with buying a gas station than it is with purchasing an apartment building or office building, reality is often clouded by perception.

Gas stations, convenience stores and truck stops can have environmental issues from the following areas: 1) Leakage 2) Spillage and 3) Migration. Leakage occurs when the tank or the lines from an underground storage tank (UST) develop a leak and contamination in the soil occurs. In truth, this happens significantly less because of improvements in underground storage tanks and leak detection equipment. Years ago, a lot more steel tanks were used and even single walled fiberglass tanks. Today, it's almost a given that a double-walled fiberglass tank will be purchased and the incidence of leakage has gone down significantly. Spillage is either where you have spilled fuel from overflowing your tank while filling up your car or from a fuel truck filling up the underground storage tanks. Again, improved vapor recovery systems have improved so that those incidences have decreased. Migration is where there has been soil contamination on another property and it is migrated to surrounding properties.

In truth, the average cost to "remediate" a gas station (which basically means to clean it up) is less than $50,000 and in most cases, gas stations and convenience stores do not even close down to have the site cleaned up. Most of the time, these costs will be paid by the State's LUST fund, which is specifically set up to pay for cleanups from leakage, spillage and migration. Not all leakage and spillage are created equal. Spilling a gallon of fuel from the car from overfilling is certainly different than a tanker truck spilling thousands of gallons of fuel, yet they're both considered "spillage." From a lenders point of view, they are concerned about liability and the borrower's ability to pay their note if the site is closed down. Every now and then you hear about a gas station that has had huge leakage from an underground storage tank and it contaminates the neighborhood and the bank is liable for the costs because someone did not pay their premium to have it covered in the State pool or the State pool is insolvent. This is VERY rare. In most cases, most bankers are not experts on environmental issues and concerns nor do many of them take the time to learn other than on a cursory level.

If you are looking to purchase a gas station or convenience store, what should you look for? The first thing you should ask the seller is if there is an open file on the site with the State's environmental division (called DEP, DEQ among other names). Some sellers will know more than others depending on how long they have owned the property and if they had to finance it. If they have a loan on the property, they most likely had a Phase I done on the property and they will know if there is an open file or if the site has been cleaned up (remediated). Do not make the mistake of simply asking "are there any environmental issues with this site?" That is a nebulous question because an issue to one person is not an issue to another. Ask if there has ever to their knowledge been any environmental issues, leakage, spillage, cleanups, or if the site has ever had or if it currently has an open file with the State. You can ask them if the fire marshall has ever had to visit the site due to a complaint of fuel vapor smells. The gas station may have had an issue ten years ago and it's gone through two owners since then, so not all sellers will know this information. Many think there is not an issue because the site is in the cleanup fund covered by the State and they have an open file, but because they know they are not liable, they feel there is no issue. Again, ask more questions.

A Phase I Environmental Site Assessment (ESA) is when a company will look online first to see if there is an open file with the State and they will make a site inspection to see if there are any obvious signs of possible environmental issues. For instance, the will go where the underground storage tank is and look to see if there is dead grass (obviously not in winter) above where the tank is. That is a possible sign of leakage. They'll look at the condition of the property, look to see if batteries, tires, oil are properly disposed of. The generally will not take a soil sample. A Phase II is generally when there is a recognized environmental condition (REC) and will take a soil sample and will go into much greater detail. If the site does not have an open file with the State and the bank wishes to do a Phase II (which cost a LOT more money to do), you probably should find another lender. In most cases, there really is no reason to do a Phase II if there is not an open file and there are not recognized environmental conditions.

You can usually do your homework and find out in a very short period of time if a site is worth pursuing when it comes to environmental issues. Obviously older sites are statistically more likely to have issues than newer ones. Sites with steel underground storage tanks are statistically more likely to have issues than newer ones. If you're looking at an older site with steel tanks, check around sufficiently because you don't want somebody else's problem becoming yours.

Harold Jaynes is with PetroMAC, one of the premier sources for funding gas stations, convenience stores and truck stops. Learn more about this at http://petromac.com

Article Source: http://EzineArticles.com/?expert=Harold_Jaynes

Article Source: http://EzineArticles.com/991004

 
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

 

 

 

 

 

 

 

 

 

sport blue 3s sport blue 3s jordan 3 wolf grey cheap jordans Cheap louis vuitton sport blue 3s michael kors outlet sport blue 3s jordan 6 sport blue sport blue 6s foamposites jordan 6 sport blue sport blue 6s louis vuitton outlet coach factory outlet online sport blue 6s kate spade outlet louis vuitton outlet legend blue 11s louis vuitton outlet