Top Gas Station Lenders
| Rank | SBA Lender | SBA Lenders HQs | # of Loans | Avg Loan | Avg Rate |
|---|---|---|---|---|---|
| 1 | Open Bank | Los Angeles, CA | 26 | $2,230,115 | 8.5% |
| 2 | US Metro Bank | Garden Grove, CA | 21 | $2,178,738 | 8.2% |
| 3 | Celtic Bank | Salt Lake City, UT | 21 | $2,752,486 | 9.1% |
| 4 | Metro City Bank | Doraville, GA | 14 | $1,614,071 | 8.3% |
| 5 | Commonwealth Business Bank | Los Angeles, CA | 12 | $2,604,750 | 8.2% |
| 6 | Southwestern National Bank | Houston, TX | 11 | $1,991,182 | 8.3% |
| 7 | Readycap Lending, LLC | Berkeley Heights, NJ | 11 | $1,867,273 | 9.2% |
| 8 | Enterprise Bank & Trust | Clayton, MO | 11 | $2,512,273 | 8.0% |
| 9 | Bank of Hope | Los Angeles, CA | 11 | $2,819,545 | 8.1% |
| 10 | M&T | Buffalo, NY | 10 | $298,050 | 10.6% |
| 11 | Citizens Bank | Elizabethton, TN | 9 | $1,622,722 | 9.1% |
| 12 | First Community Bank | Lexington, SC | 8 | $1,759,625 | 8.9% |
| 13 | East West Bank | Pasadena, CA | 8 | $2,016,250 | 8.4% |
| 14 | Harvest Small Business Finance | Laguna Hills, CA | 8 | $1,221,138 | 9.5% |
| 15 | Byline Bank | Chicago, IL | 7 | $1,685,714 | 9.6% |
| 16 | New York, NY | 6 | $1,950,000 | 9.4% | |
| 17 | PCB Bank | Los Angeles, CA | 6 | $2,819,500 | 8.5% |
| 18 | Associated Bank | New York, NY | 6 | $1,950,000 | 9.4% |
| 19 | Beacon Bank | Riverdale, UT | 6 | $2,979,933 | 7.5% |
| 20 | America First Federal Credit Union | Riverdale, UT | 6 | $2,979,933 | 7.5% |
Recent Gas Station Loan Activity
| Industry | Year | Qtr | # of Loans | Avg Loan | Avg Rate* |
|---|
* Note that most SBA loans are variable-rate loans. The rates listed above is the initial interest rate at loan closing. Variable-rate SBA loans fluctuate by the fed funds rate set by the Federal Reserve.
Thousands of new gas stations with convenience stores are built across America every year or come up for sale. Over 99% of gas stations are independently owned, not by big oil companies. While profit margins are lower on gas, the margins on other items sold inside the convenience store side of the station are very healthy.
Over time, a new gas station builds a loyal following from nearby residences and businesses because of its convenience. Gas stations located on busy highways can also do very well.
An SBA loan can help get your gas station off the ground or expand an existing station. In addition, it can be used to buy inventory, add pumps, refinance debt, purchase a competitor’s gas station, and many other purposes.
Borrowers should pick an SBA lender with extensive gas station loan experience, as quoting the SBA “..documentation associated with gas station loans can be voluminous and complex.”
Benefits of owning a gas station
Along with a high earning potential, the biggest benefit of owning a gas station is the personal satisfaction of owning your own business. You set your operating hours, decide how many employees to hire, set your prices, and enjoy all the other benefits of owning your own company.
Owning a gas station also means you’ll make a nice living. You decide how big you want your business to grow, when to hire additional workers, and whether you want to open additional stations.
How to obtain financing to open, expand, or buy a gas station
If you’re looking for gas station financing, consider applying for an SBA loan. The various loan programs offered by the Small Business Administration can help provide the funding you need to set up your business.
The SBA is a government agency that doesn’t lend you the money directly. Instead, it guarantees a significant portion of your loan. That lowers the risk profile for SBA’s lending partners, which include conventional banks and financial institutions, so they’re more willing to approve loan requests.
You also must put significantly less cash or equity down to qualify with an SBA loan. And, with an SBA loan, no covenants or collateral is required.
The most common SBA gas station loans include the SBA 7(a) and Express loans.
SBA 7(a) loan for starting or buying a gas station
The 7(a) is the preferred SBA loan for gas stations. You can use the funds made available through this program to purchase inventory, expand your current location, or even buy a competitor’s station.
If you own an existing gas station and want to buy out a partner, you can also utilize the funds from an SBA 7(a) loan for that purpose.
The maximum SBA loan for a gas station is $5 million and is generally repaid with monthly payments that include interest.
The payment stays the same for fixed-rate loans since the interest rate is locked in. However, for variable rate loans, it’s up to the lender to request a different payment amount if the interest rate changes.
SBA Express Loans for gas stations
SBA Express Loans are a part of the agency’s 7(a) loan program. Up to $500,000 can be borrowed under an Express loan. The approval times are typically much faster for these loans.
Express loans over $25,000 have a collateral requirement. The SBA usually responds to Express loan applications within 36 hours.
The lenders ultimately make all eligibility and credit decisions. The market prime rate plus 4.5-6% interest is applied with repayment terms of up to 10 years.
Environmental Considerations for Gas Station Loans
Gas station loans are subject to specific requirements to ensure the safety and environmental compliance of the property and equipment involved. These requirements aim to protect the environment and the borrowers. This article outlines the necessary steps for conducting an environmental investigation for gas station loans, including site assessments, regulatory compliance, and remediation, if needed.
Environmental Site Assessment
To obtain a gas station loan, an environmental investigation must be conducted. The investigation involves several key components:
Phase I Environmental Site Assessment (ESA) – An independent Environmental Professional will conduct a Phase I ESA. This assessment examines the property and adjoining properties, analyzing relevant environmental records. It may also include records provided by the seller if the loan is for property purchase.
Tank and Equipment Testing Compliance – The Environmental Professional must determine compliance with regulatory requirements for tank and equipment testing. Documentation supporting this determination should be included in the investigation, even if the loan is secured by real property.
Further Investigation (Phase II) – Based on the Phase I ESA, the Environmental Professional may recommend a Phase II investigation if necessary. A Phase II investigation involves more detailed analysis and may require the expertise of a licensed Environmental Professional with relevant experience. The report should include any recommended remediation measures.
Compliance with Tank and Equipment Testing
The Environmental Professional’s investigation should verify whether the gas station meets all regulatory requirements regarding tank and equipment testing. Before the loan is disbursed, full compliance with these requirements must be achieved. Any leaking or defective equipment, systems, or containment devices should be repaired or replaced prior to disbursement.
After completing the environmental investigation, the following outcomes may arise:
- Property is Not Contaminated – If the Environmental Professional determines that the property is not contaminated, the SBA Lender (except on specific loan types) must submit the investigation results to the Small Business Administration (SBA) for review. The lender should also provide recommendations and seek SBA’s agreement.
- Property is Contaminated – In the event that contamination is found, the investigation report should include a detailed description of the contamination and an estimated cost for remediation. This information helps lenders and borrowers understand the scope of the issue and plan for necessary actions.
Gas station loans require thorough environmental investigations to ensure compliance with regulatory requirements and protect the environment. By following these requirements, lenders and borrowers can make informed decisions regarding the safety and viability of gas station properties.
How to apply for an SBA gas station loan
Access our network of SBA lenders that includes leading nationwide banks, credit unions, and other financial institutions. Our lending partners are experienced in handling applications for gas stations, so they will diligently pursue your opportunity.
There are countless SBA approved lenders that are ready to offer you a gas station SBA loan. These are just some of the top lenders:
Gas Station SBA Loan FAQs
1. What is an SBA loan?
An SBA loan is a loan backed by the Small Business Administration, which guarantees a significant portion of the loan, reducing the risk for lenders. You work with the lender to obtain the loan, not the SBA.
2. What types of SBA loans are available for gas stations?
The most common SBA loans for gas stations are the SBA 7(a) loan and SBA Express loan.
3. How much can I borrow with an SBA loan for a gas station?
You can borrow up to $5 million with an SBA 7(a) loan and up to $500,000 with an SBA Express loan.
4. What are the interest rates for SBA gas station loans?
Interest rates for SBA loans are variable and can change with the federal funds rate, which is set by the Federal Reserve Bank. The table above shows
5. What are the environmental requirements for SBA gas station loans?
Environmental requirements include Phase I and Phase II Environmental Site Assessments, as well as compliance with tank and equipment testing regulations. These ensure the property is safe and compliant with environmental standards.
6. How do I apply for an SBA gas station loan?
You can apply through our network of experienced SBA lenders who will guide you through the application process and help you secure the financing you need.
7. What can I use an SBA loan for in my gas station business?
You can use an SBA loan to purchase inventory, expand your station, buy a competitor’s station, refinance debt, or buy out a business partner.