Found Some Gas Stations For Sale -
Try Getting SBA Financing NOW
Financing gas stations and convenience stores has never been at the top of the list for most
banks and lending institutions. Now it's gotten even tougher. Because of recent changes in SBA lending
guidelines,obtaining a purchase loan got a lot more difficult.
SBA has been perceived as "B" credit financing for many people which is not accurate. SBA could
finance things like working capital and inventory which banks frequently would not do on a conventional basis and
generally would do a higher loan to value (LTV) loan than many banks. In reality, it was the banks lending the
money and the SBA would guarantee the loan.
Effective June 15, 2008, the SBA will require all sellers to provide an
environmental indemnification agreement regardless if the site has ever had an environmental issue or not. Fun,
huh? Imagine this... you're buying a station that is a few years old...it's in pristine condition... the
site has never had an environmental concern... now the SBA wants the seller to sign that they will indemnify in
case of leakage, spillage or migration for the entire life of the loan if the State's LUST fund goes insolvent or
if private insurance is not effect by the owner. So, even though YOU had nothing to do with the leakage
or spillage, you might be responsible for it! Fun stuff... good times! How many sellers do you think will want
to sign off on this? The SBA also will now require a Phase I environmental on business only purchases
Secondly, the SBA no longer wants to have appraisals with an income approach in it. Appraisers
are in arms about this because this is contradictory to their own guidelines that they go by. They also want to
have a business valuation done by a third party company instead of the income approach, adding time and expense to
If this isn't bad enough, if you're borrowing part of your down payment from a home equity loan,
the SBA will require that if you are married, your spouse will need to work in a job that has nothing to do with
your business, to assure that the home equity loan is paid.
If this concerns you, it should. It would appear that the not so veiled message is that the SBA
does not want to finance gas stations and convenience stores with fuel anymore. I'd complain to your local
representative and Senator to make your feelings known.
With all this having been said, it is imperative that you deal with people that specialize in
financing gas stations and convenience stores, who hopefully are aware of financing in this asset class.
Harold Jaynes is with PetroMAC, the premier source for financing gas stations, convenience
stores and truck stops. We have closed hundreds of millions of dollars in this asset class. We're former oil
company marketing managers, jobbers and gas station owners and know all facets of the industry. Come visit our web
site at http://petromac.com and contact us to be pre-qualified for financing.
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