Conventional Financing

Conventional loans for gas stations are the preferred means of financing for many borrowers for any number of reasons. Conventional financing certainly has its advantages. It may be quicker and require less paperwork like an SBA loan, but it may or may not be the best option for you. The rates will most likely be lower than an SBA loan and the fees will probably be less.

A conventional loan for a gas station might be done by a bank, a credit union, or an insurance company. It’s also referred to as a term loan. The lender may required a depository relationship. A high percentage of conventional loans will offer fixed rates. Conventional loans usually have a shorter amortization period than an SBA loan, whether 7(a) or 504. Conventional loans will normally have a much shorter term, typically 5, 7, or 10 years. Then the loan will normally balloon.

conventional gas station loan

Below is a brief summary of various conventional loan programs  

Conventional Loan Program Highlights for Gas Stations and Convenience Stores

Types Of Financing:

          Acquisitions (single store or  multi-store portfolio)

          Expansion / Rebuilds

          Conversion of a service station to a full-serve convenience store


          Equipment upgrades

Terms:                                   5,7,10 Year Terms

Loan Amortization                  15 or 20 Year Amortization (depending on the age and condition of the property)

Interest Rate:                         Fixed or variable

Loan To Value:                      50 – 75%

Third Party Reports                Appraisal, Phase I Environmental Site Assessment, Property Condition Report

Fees and Expenses:              None To Minimal Lender Fees

                                              Due Diligence Deposit

                                              Customary Closing Costs

                                              Construction Fee, if applicable, to offset monitoring costs

                                              Conventional origination fee will normally be 1%

We have a national network of lenders that we’ve worked with over the last 20+ years. All of the lenders in the retail petroleum business have varying credit standards and minimum criteria for qualification.  PetroMAC knows which lenders will fill the requirements of your loan request.  In general, conventional bank lenders have minimum qualification requirements that prospective borrowers have to meet.  

Underwriting Timeline:

Upon receipt of a complete loan application and back-up support documentation, PetroMAC will put together a detailed presentation to the lenders.   PetroMAC will canvas its lender database to determine which lender / lenders are the most suitable for the loan transaction. Loan decisions are normally made within four weeks of receipt of all requested documentation.

Conventional financing is the most effective loan program for single store operators to multi-store operators as well as wholesale jobbers due to general lower origination costs and lower interest rates compares to SBA 7(a) or other government guaranteed financing. Conventional financing is more effective for all types of borrowers who need flexibility in structuring a loan and could need additional financing in the future. Although conventional bank financing may have shorter amortization periods and higher debt service coverage requirements, a conventional lender can continue to support a borrower’s other future borrowing needs including lines of credit, equipment financing and construction lending for new store development.

You can conveniently apply for a gas station loan with our online application.

You can also download our pdf application here.

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