Q: How do you determine if you do a loan SBA, conventional
or on some other basis?
A: That decision
is usually based on the cash flow of the business, since it is easier to qualify
for SBA financing with less cash flow than with conventional financing. If
a loan needs to close quickly because a borrower is about to lose a deposit or a
site has been purchased at auction and needs a quick closing, we will frequently
use bridge or short term financing programs.
Q: What are the rates:
A:
Our
rates will be very competitive and are based on Prime, Treasuries, LIBOR and on the
contract structure and credit risk.
Q. What is
your turnaround time?
A: Our target is to
have loans approved and closed within 45 -60 days. 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. Again, commitment letters will not come prior to receiving all requested information.
Q: Do you require Phase 1 or Phase 2 Environmental reports?
A: If Phase 1 Site Assessments and Phase II Subsurface Investigations have been
previously prepared, they are reviewed by the lender's environmental staff. A
Phase I or Phase II is usually valid for six months according to industry standards. If the report is
older than six months, it is usually required that the company update
the report.
Q: Will PetroMAC do
financing for properties with known environmental problems?
A: Yes, assuming all
information
required by the lender's environmental staff is provided and all standards
are met. Most environmental "issues" are not issues per se. Refusing to consider
properties with supposed "issues" usually represent a lender's reluctance to lend to the
industry in general because other asset classes such as multifamily, office
buildings, storage facilities pose less risk to the lender.
Q: How much does an environmental report cost?
A: A Phase I
environmental report normally costs approximately $2,000. It normally
takes 1-2 weeks to have a Phase I environmental completed. The cost of a
Phase II depends on the recommendations an environmental company has
made.
Q: The site I am purchasing has been
remediated and is currently being monitored, but I do not have a "No Further
Action" letter. Can I obtain financing?
A: Depending on if an indemnification agreement is available and
who the indemnification agreement is from (i.e. from oil company, jobber or
dealer) will dictate what type of financing that is
available.
Q: The station I am looking to buy
has old steel tanks. Can we obtain financing?
A: Yes,
however, the site most likely will need to have the tanks replaced with
fiberglass tanks in the upcoming years due to new EPA regulations that will take
place in 2009.
Q: Does PetroMAC only do financing for
gas stations and convenience stores?
A:
No, we do financing convenience stores, service stations, truck stops, car
washes, oil and lube centers, and related concepts. The list is always
expanding, and we are open to exploring new areas.
Q: What if we do not have enough money for our down payment. Do we
have any options?
A: Yes, frequently we
arrange for petroleum suppliers (jobbers) to provide equity infusions. This will
necessitate a long term fuel agreement (usually ten years) and possible
re-branding/re-imaging. Jobbers normally do this arrangement for locations that
pump at least 750,000 gallons per year at a minimum. PetroMAC also has at
its disposal Joint Venture parterships for "A" transactions.
Q: The station I am purchasing is an independent. Can I
obtain financing?
A: Yes, but we
typically would make sure the individual has significant experience. It
would also depend on if the borrower had a long term fuel supply agreement or if
the borrower were purchasing spot.
Q: What is the
most difficult loan to do?
A: A business only
acquisition is typically the most difficult loan to close because of the lack of
available collateral. Individuals without significant management
experience and capital typically will have a difficult time obtaining financing
from lenders.
Q. What are the main reasons
loans are declined?
A: Lending activities tend
to go in cycles and certain asset classes fall in and out of favor with lenders
frequently. The main reason loans are declined in with C & G
(convenience and gas) loans is because lack of verifiable cash flow. Most
of our activities are in acquisition financing and frequently sellers have not
declared all of their income which makes verifying all of their revenue
problematic. Frequently we run out of time because the borrowers have gone
to other lenders prior to PetroMAC leaving a short time frame to close their
loan. Many borrowers have very poor documentation to present which
takes loan officers and processors an inordinate amount of time to
present a loan in the best possible light to an underwriter. In the past few
years, many more loans have been declined due to the borrower lacking
direct industry experience and borrowing funds for their equity infusions.
A percentage of loans are also declined due to environmental
issues.
Q: Who
does PetroMAC use for appraisals?
A: We
only use companies that specialize in the C & G industry. These
companies have significant experience appraising gas stations, convenience
stores and truck stops. Some properties do not cash flow what the actual
real estate value of the property is worth, and some cash flow significantly
more than what the actual asset is worth, so we use companies that can
distinguish value based on cash flow.
Q: How
much does an appraisal cost for a gas station or convenience store?
A: It normally costs $2,500 - $3,000 for an
appraisal on a gas station or convenience store. Appraisals for large
truck stops and travel centers cost more.
Q: How long does it take to do an appraisal on a gas
station or convenience store?
A: It normally
takes three to four weeks for an appraisal. Borrowers can pay an
additional fee to have an appraisal done on an expedited
basis.
Q: I'm a New American and I still do not have
permanent resident alien status. Can I obtain financing?
A: Yes, but you would not be eligible for SBA financing and
most conventional programs. You would be eligible for financing under the
bridge loan program, which can extend a loan for up to five years.
Q: Does PetroMAC operate from a centralized location?
A: No. 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.
Q: Is PetroMAC aware of sites that are for sale?
A: Yes. Many oil companies send
us their surplus lists as well as many banks send their REO (Real Estate Owned)
lists of distressed properties they are trying to dispose
of.
Q: Do you do construction financing?
A:
Yes
Q: Can PetroMAC assist me in
other areas of my business?
A: Yes. Part
of the services we offer is to assist the operator or dealer in negotiating fuel
supply agreements, vendor agreements and consulting
services.
Q: Is PetroMAC a
direct lender?
A: No. PetroMAC has
corresponding relationships on a conventional basis and brokers SBA
transactions. Most brokers and borrowers can not approach our 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. You do not pay more for your loan by dealing with
PetroMAC.
To pre-qualify for financing, download the following forms and provide the following information and fax to
(202)478-1811 or email to fixed@petromac.com:
So what are you waiting for? You can conveniently 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”
(202)478-0230 Voice
(202)478-1811 Fax
http://petromac.com
info@petromac.com
