Search
gas station business

Best Gas Station Business Loans

Gas stations are widespread throughout the U.S, yet they are quite challenging to manage and finance. If you have just finished your qualification in this field, you may be looking for small business funding to open a franchise of your own. This article covers the types of gas station business loans available.

At a glance There are numerous gas station business loans with more extensive flexibility, covering only what you need when you need it. Some of these lenders help you with startup funds and operating expenses no matter what your credit score looks like. We’ll show you which loan types you can apply for and what factors you should consider before opening your doors to the public.

A Quick Overview of The Best Gas Station Business Loans for 2021

With so many finance options on the internet, we decided to put together a list of the best gas station business loans to cover your possible expenses. You’ll also find a few recommended lenders in the table below. 

Financing Need

Best Loan Type

Loan Features 

Recommended Lender

Initial capital outlay

SBA loan

  • Amount: Up to $5 mil
  • Term: Up to 25 years
  • Interest: From 6% and up
  • Time to get the loan: Up to 2 weeks

SmartBiz

Equipment

Equipment financing

  • Amount: 100% value of equipment
  • Term: Up to 6 years
  • Interest: Between 4% and 40%
  • Time to get the loan: Up to 48 hours

Fundera

Daily operations

Business line of credit

  • Amount: Up to $500,000
  • Term: Up to 18 months
  • Interest: Between 7% and 25%
  • Time to get the loan: Up to 24 hours

BlueVine

Payroll and maintenance

Merchant cash advance

  • Amount: Up to $500,000
  • Term: Repaid weekly or monthly
  • Interest: Up to 1.5% of sales
  • Time to get the loan: 24 hours

Square Capital

Renovations

Short-term loan

  • Amount: Up to $250,000
  • Term: Up to 18 months
  • Interest: From 14%
  • Time to get the loan: 24 hours

OnDeck

Best Gas Station Business Loans Explained

It’s time to take a more in-depth look at the gas station business loans mentioned in the table above. We will indicate how each loan type can help your business thrive. We’ll also explain why we showcased the selected lenders.

1. SmartBiz - Best for SBA Loans

Small Business Administration (SBA) loans offer many of the features that other small business funding solutions offer. For example, you can use this loan type to purchase inventory, acquire equipment, or even finance land acquisition. If you do so through an approved SBA lender, however, the government may guarantee a large portion of the loan. 

SBA loans are exceptionally helpful when it comes to obtaining capital to open your gas station business. You can also use it for the first year’s operating expenses until you build up your revenue. As a new company, you’ll have access to funds immediately for all your business plan projects.

SmartBiz is aware of how difficult it is to get loans from banks and stepped in with its innovative technology for better fund management. It aids you by comparing various offers that will best suit your business. SmartBiz will adjust the amounts and repayment terms until they find a solution that suits you. 

 

2. Fundera - Best for Equipment Financing

Equipment financing demands a different approach than that required from standard loans. A lender will finance up to all the cost of the equipment you need. You can also use this type of financing to add new items to your inventory or to replace outdated equipment.  

Equipment plays a significant role in gas station businesses. You’ll need to plan for short and long-term assets as new technology becomes available every year, drastically improving service delivery.  

Fundera is an approved SBA lender, however, we selected it for its comprehensive equipment financing solution. Fundera is happy to work with startup businesses since it understands that it can be difficult to start out as a new gas station owner. Fundera may even negotiate on your behalf to obtain top deals and discounts for asset purchases.

3. BlueVine - Best for Business Line of Credit

While capital and operating funds are a must, you will also need funds to cover your daily expenses. A business line of credit acts as a revolving loan, letting you reuse the funds that you repay. Its most significant benefit is that you only pay interest on what you use and not the entire credit limit.

Using your available funds on daily expenses while operating the gas station business could quickly deplete your budget. A business line of credit will help you cover unexpected costs, such as emergency maintenance or repairs. You can even use it to pay for marketing campaigns if you’re having a slow month.

BlueVine delivers an excellent business line of credit, making funds accessible in a short amount of time. You can view and manage your loan amount on a client portal. This portal provides complete transparency so that you have insight into what you owe. It also has low requirements and competitive interest rates.

4. Square Capital - Best for Merchant Cash Advance

A merchant cash advance provides you with a lump sum amount that you can use to cover short-term costs. However, you will need to repay the lender by paying them a percentage of the sales you make. This is how it works: you will have a credit and debit card machine that customers will use to pay for your services and products. Every time they make a payment, the lender will take a small percentage as loan repayment. 

Most customers that pull up at a gas station will use bank cards to pay for fuel and groceries from the convenience store. You will likely be able to pay your cash advance back quickly once your business starts attracting clients. 

Square Capital is our choice lender for merchant cash advances. You will need to register as a member before you apply for a cash advance with this lender. Square Capital has the benefit of quick disbursement and easy applications. If you manage to pay the lump sum back sooner, you won’t need to worry about prepayment fees.

5. OnDeck - Best for Short-Term Loans

Short-term loans help existing businesses who need a fund injection to expand their business or upgrade their site. In most cases, you need to have been running a company for a few years before you can qualify for this loan type. You can pay off a short-term loan relatively quickly if you have a solid business plan. 

These loans are ideal for gas stations that are in need of renovations or upgrades. Gas stations also often require heavy capital investment for upgrades, due to industry costs. A short-term loan can help you cover such expenses. 

OnDeck has several short-term loan options you can choose from. Alternatively, you can let OnDeck survey your project requirements and offer you a proposal. If you do well on your payments, it may give you a discount on the total repayment value. It can also add other funding alternatives, such as a business line of credit.

Recommended Reading: Best Car Wash Financing Options

How Much Does it Cost to Open a Gas Station Business?

While the primary goal of a gas station is to provide fuel to the public, a gas station can have multiple functions and facilities. For instance, it can include a convenience store and wash bays. The location and market prices will also significantly impact the amount of money you will need to invest and the extent of your expenses.

Even if you buy into a franchise, the franchise owners will expect you to use your own funding when setting up your site and purchasing equipment. You also need to consider hiring workers for both the gas station and stores and using marketing campaigns to drive more customers to your business.

One aspect many new companies don’t consider is insurance for when things go wrong. Your business plan should cover short and long-term assets based on how long you want to operate before you upgrade. You may end up spending $300,000 and more just during the first year.

Here’s a list of some of the elements that gas station business loans should cover:

  • Legal and insurance fees
  • Rental
  • State permits
  • Gas station development
  • Convenience store
  • Signage and marketing
  • On-site cash
  • Inventory and equipment
  • Employees

Recommended Reading: Best Transportation Business Loans for 2021

How to Choose the Best Gas Station Business Loans

The gas station business loans you choose will depend on your business plan requirements. Do you need a lump sum to cover all costs for the foreseeable future, or do you need daily financing as and when required? You should look at how flexible the lender is in terms of repayments and access to funds.

You’ll also need to evaluate how quickly you’ll receive the funds. Are you able to wait for two weeks before the money is available, or do you need it within the next few days to close a contract? What other requirements will delay the process and hinder your project?

We also advise seeing how many loan options a specific lender provides. Perhaps you can obtain an SBA loan alongside a business line of credit. It also helps if the lender can evaluate your business needs, and then give you an outline of your best loan options.

Recommended Reading: Best Convenience Store Loans

See Our Additional Guides on Industry-Specific Loans

Bottom Line

There’s no doubt that a gas station business requires a massive capital injection to get started, but you’ll also need operating funds along the way. Finding the best gas station business loans is imperative to the prolonged success of your company. We hope that this article has pointed you in the right direction.