Petrol stations are one of the few US retail businesses that can provide 24/7 revenues.
From motorists buying fuel and travelers wanting snacks, to last-minute shoppers needing an essential item or early birds chasing their daily newspaper, petrol stations can generate a constant stream of customers. This means buying a petrol station can be a solid business opportunity, however, petrol stations don’t come cheap. Whether you buy a franchise operation, or an independent station, the cost can be high – for example, a BP franchise will typically require a total investment of $2million by the time the franchise fee, startup costs and shop build-out are factored in.
Few people will have the cash required to buy a US petrol station, however, there are a range of loans available to fund the purchase and upfront costs. Read on to find out more about petrol station loans and how to get your next big business concept firmly on the road.
Petrol station loans fall into two main categories:
Commercial mortgages function like a regular residential mortgage. The lender provides part of the cost to buy the petrol station, and they take a legal charge over the property as security. You pay back the loan over 20 – 30 years. This type of loan may also cover some of the initial build-out costs, or they could be financed with a separate construction loan. Alternatively, franchise finance, which may offer a package of funding options, could be used to buy a petrol station, cover the build-out costs and even provide some funds towards your startup expenses.
As well as paying for stock for your shop, hiring staff, marketing, and other startup expenses, you will usually be required to pay a hefty deposit for fuel. This can badly dent your cashflow. Fortunately, finance in the shape of small business loans, asset finance, merchant-cash advances, and the leasing of equipment can ease the burden. Some of these loans need no or little security to obtain and poor credit may not be an obstacle to funding.
Buying a petrol station is a big decision. Here are a few things to consider before making the leap.
Planning permission for new petrol stations is difficult to obtain, so you will usually buy an existing business. Just like houses, the most important thing with any petrol station purchase is location, location, location. You need a constant flow of motorists and local shoppers. Corner sites, locations on major roads, sites on busy junctions and crossroads, stations close to motorways, airports and popular tourist venues are ideal spots to buy a business. As you might expect, petrol stations in busy urban areas will generate more turnover than one in quiet rural locations, although the purchase price will reflect the economic possibilities – a city will usually cost a lot more than a countryside location.
Even using a range of financing products, you will still need some cash to buy and start your petrol station business. For example, a commercial mortgage will typically require a 10% to 25% deposit. What assets – cash, property, stocks, bonds, etc. – can you bring to the table, and how easy will it be to either use them as collateral for a loan or to sell them to raise hard cash? Starting your petrol station business without adequate assets or funds to get you through the cost phase and into the profit-making phase could leave you exposed to unnecessary risk.
What is your plan for the business? Do you intend to hold it for a long-term investment, or do you plan to develop the station, perhaps adding more features such as a drive-through car wash, and then sell it on for profit? Your overall business strategy will affect the financing you may obtain and how you build the business over time.
Once you’ve found a site that fits your business strategy, you can apply for a petrol station loan.
No, although it is helpful, particularly when applying for a franchise operation.
Owning a petrol station can provide you with a lucrative retail business that has less reliance on seasonal income, although finding the best finance to cover the purchase price and support your new operation into the money-making phase can be challenging. However, that doesn’t mean you have to park your big idea. From commercial mortgages and franchise finance, to working capital loans, Swoop has you covered.
Don’t get stuck in first gear. Get in the fast lane with Swoop. Buy your petrol station now.
Swoop was amazing! I was looking for refinancing and they were straight onto finding me the best possible option. I would highly recommend them.
Owner, F45 Cambridge
Written by
Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Wells Fargo Bank, Visa, Experian, Ebay, Flywire, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of US consumer and business finance.
Swoop promise
At Swoop we want to make it easy for SMEs to understand the sometimes overwhelming world of business finance and insurance. Our goal is simple – to distill complex topics, unravel jargon, offer transparent and impartial information, and empower businesses to make smart financial decisions with confidence.
Find out more about Swoop’s editorial principles by reading our editorial policy.
Disclaimer: Swoop Funding LLC (“Swoop”) is a financial technology platform and commercial finance broker, not a lender. Swoop does not provide loans or make credit decisions. We match US-based firms with third-party lenders, equity funds, and grant agencies. All financing is subject to lender credit approval and the specific terms and conditions of the funding provider.
Broker Compensation Disclosure: Swoop provides its platform and matching services to applicants at no direct cost. We receive compensation in the form of a commission or referral fee from the finance providers in our network upon successful placement. This compensation may vary by provider and product. In certain instances, the commission paid to Swoop may influence the interest rate or terms offered by the lender, which can affect the total amount payable under your agreement.
Credit Authorization & FCRA Notice: By submitting an application or registering an account, you provide “written instructions” to Swoop under the Fair Credit Reporting Act (FCRA) to obtain your personal and/or business credit profile from consumer reporting agencies. This information is used solely to evaluate your eligibility for financing and to match you with appropriate lenders in our network.
State-Specific Disclosures:
Florida & Utah: Swoop complies with state commercial financing disclosure laws regarding the transparency of terms for non-real estate secured commercial transactions.
Entity Information: Swoop Funding LLC is a Delaware limited liability company. US Headquarters: 43 W 23rd St, New York, NY 10010, United States. Contact: hello@swoopfunding.com
General Terms: Applicants must be 18 years of age or older. All firms must be registered and operating within the United States. SBA loans are issued by private lenders and guaranteed by the U.S. Small Business Administration; Swoop is not a government agency. Please review our Terms of Use and Privacy Policy for full details.
If you have a complaint, please refer to our Complaints Policy.
UK
IRE
AU
CA
US
ZA
NA
yet? Register here!