Deciding to get into the gas station business or expand to another location is a sound financial decision for many different reasons. It is particularly a good idea if you have a location where there is a high volume of traffic, easy access to your property and no competitor’s filling stations in the immediate vicinity. However, even under these optimum conditions getting gas station loans may be a very difficult task.
Regulations
There are several different issues that come into play when traditional lenders are evaluating applications for gas station loans. One of the biggest issues is the government regulations on environmental law that impact gas stations and auto repair shops much more than other types of businesses and industries. Changing types of products sold at filling stations, including new options such as hydrogen fuel, ethanol, natural gas and even bio-diesel have created additional requirements and regulations.
Failure Rates
If you look at any numbers for the Census Bureau or the Bureau of Labor Statistics it is pretty bleak as a start-up company in any business. However, if you look at failure rates of new businesses by industry sector you will find that businesses in the transportation, communication and utilities sector come in second from the worst with a five your survival rate of just 39.4%. This makes it difficult for traditional lenders to approve gas station loans based on what is going on in the industry as a whole.
Stuck with a Station
You can add to that the very real issues that if gas station loans are approved and then the business does go under, the bank is stuck with a non-working gas station. These are not buildings and properties that can be easily sold and they are liability to the lender of the gas station loans having to maintain environmental standards to avoid penalties and fines.
The best option to consider if you are interested in gas station loans is to work with a financial company that specializes in these types of loans. The company will have lenders that are experienced in the industry that can provide accurate appraisals and information on gas station loans and how your business proposal stacks up.
Our lenders are able to provide gas station loans to qualified applicants. To learn more go to website.
