A gas station business loan can provide small businesses with funds to manage their capital flow, cover day-to-day expenses, fulfill seasonal demand, etc. There are various loan options available to help fund or expand your business.

Here's what you need to know about gas station business loans.

What is a Gas Station Loan?

A gas station loan is a business loan that provides funds specifically to gas station shop owners who need financial assistance. It can provide funds to manage capital flow, cover the day-to-day expenses, fulfill seasonal demands, marketing expenses, pay employees, etc. Consumer trends within the current marketplace often drive gas stations. Sometimes customers request special items, or you may need to upgrade your point of sale system to keep up with demands. When funds are not available right away, gas stationers often utilize a gas station business loan to cover these required expenses.

A shop owner can also use a gas station business loan to pay employees during a slow season, invest in marketing, and buy items to streamline their business. Luckily, plenty of different loan options are available to help keep your business afloat within the gas station industry.

Types of Gas Station Business Loans

There are many loans a gas station can utilize to help its business. Here are the more widely used loans:

SBA Loans: Partly guaranteed by the U.S. Small Business Administration, traditional and non-traditional lenders offer SBA loans. The program provides highly flexible rates and terms ideal for small businesses. Well-established companies looking to expand their initiatives can use several SBA loans.

Businesses must meet the following requirements to be eligible:

• Operate for profit
• Be considered a small business, as defined by the SBA
• Be engaged in, propose to do business in, the United States or its possessions
• Used alternative financial resources, including personal assets, before seeking financial assistance
• Not be delinquent on any existing debt obligations to the U.S. Government

These SBA loans, in particular, can benefit small but growing businesses within the chiropractic field.

SBA 7(a) Loan: 7(a) loans are the most common within the SBA family. With access to up to $5 million in working capital for 25 years, these types are typically adequate for most industries. Interest rates are between 7-8% depending on trade and the nature of your business. Most businesses opt-in for an SBA loan fall under this 7(a) category.

SBA 504/CDC Loan: 504 loans are particular; it provides long-term, fixed-rate financing through Certified Development Companies (CDCs), SBA's community-based partners who regulate and promote economic development within their communities. If your business needs to purchase commercial real estate or perhaps a large piece of equipment, this may be the ideal loan program. The borrower may need to provide 20% of the total value, with the SBA kicking in 40% and the lender the rest. The cap on this type of loan is generally $5 million.

Businesses must meet the following requirements to be considered eligible:

• Have a tangible net worth of less than $15 million
• Have an average net income of less than $5 million after federal income taxes for two years preceding your application

Business Lines of Credit: Banks, financial institutions, and other licensed lenders often extend credit to creditworthy customers to address fluctuating cash flow needs. It is effectively a source of funds that borrowers can readily tap into at their discretion. Borrowers use this financing option rather than taking a significant, long-term business loan. When borrowers open a business line of credit, they receive access to a state amount of funds to use as needed. A monthly statement reflecting the amount of credit used will also include any interest charges, and borrowers will only pay interest on the funds used.

Most lenders will require the following basic information during the application process:

• Copy of Business License
• Tax Returns
• Three months of Bank Statements
• Standard financial documents like P&L, AR, AP, Cash Flow, etc.

Equipment Financing: Equipment loans are funding options that allow for business-related equipment purchases.

Equipment can include phone systems, computer monitors, printers, coolers, pumps, lights, security, specialized machinery, etc. Most lenders will require three years of tax returns for the business, the purchase agreement of the equipment, personal financial statements, and identification of each owner.

Long-Term Business Loans: This type of term business loan provides borrowers with a lump sum of funds, with a repayment plan of regular intervals of 5 to 25 years. A long-term business loan has a fixed floating interest rate and monthly or bi-monthly payments deducted from a business bank account. This financing option is best for businesses that need significant capital at a lower interest rate.

Short-Term Business Loans: Short-term loans can be highly beneficial during a growth period, fluctuating cash flow times, or a need for seasonal purchasing. It provides a lump sum upfront to a borrower and has a repayment period ranging from three months to three years. Small or medium-sized businesses can use these loans to enhance their activities.

Short-term loans have almost no limitations on their uses, and borrowers can decide how to spend the funds once they receive them within 1-2 business days. The application process requires proof of ownership of your business, financial statements, tax information, P&L statements, and a copy of your driver's license. Lenders will check your business and personal credit as well.

Who should apply for these types of loans

Any small or growing business can always benefit from an additional source of capital to enhance their business. There are several reasons a gas station owner would look to acquire these types of loans, including:

• Upgrade necessary equipment
• Expand locations
• Purchase seasonal inventory
• Payroll
• And more!

There are several determining factors taken into consideration to determine your qualifications for these loans. To help review the various loan options, we've taken the liberty of providing the requirements for the loans listed above.

Business Line of Credit Requirements

Similar to term loans, a business line of credit will require financial records and documents to determine the financial health of your business. A minimum credit score of 500 or higher may be necessary to qualify, depending on the lender. At a minimum, some lenders will require your business to be operational for at least six months and able to earn $25,000 in revenue.

During the application process, lenders typically require business line of credit applications to provide personal and business tax returns, bank account information, and business financial statements. By partnering with a lender, companies can obtain their business line of credit within days, whereas banks generally have a longer wait time.

Short-Term Loan Requirements

Short-term loans can help businesses obtain funds quickly to cover immediate expenses, equipment, payroll, emergency repairs, and other general business needs. These loans are not for extensive, significant conditions such as purchasing real estate or acquiring another business.

The application process requires proof of ownership of your business, financial statements, tax information, P&L statements, and a copy of your driver's license. Lenders will also check your business and personal credit as well. Once approved, companies can obtain their funds within 1-2 business days.

Equipment Financing Requirements

With equipment financing, you will work with a lender to secure your loan. Most lenders will require three years of tax returns for the business, the purchase agreement of the equipment, personal financial statements, identification from each owner. Generally, they will require you to bring a quote detailing how much the new or used item will cost or documentation of comparable value and utility items.

Inventory Financing Requirements

Inventory financing can be considered a line of credit or a term loan used to purchase the inventory your business needs to operate. Inventory financing can be a suitable funding option for businesses that need to buy the merchandise to prepare for a busy season, meet an increased need in customer demand, or cover short-term cash flow gaps. This type of loan is designed to be a short-term financing solution.

Businesses do not need to be established to be eligible for inventory financing. Most lenders will require companies to be up and running in six months to a year to qualify. Though every lender is different, lenders may require businesses to maintain an annual revenue of $100,000 and a minimum business or personal credit score of 600 or more.

Advantages of Gas Station Business Loans

Not only can gas station business loans provide the required funding, but they can also offer other perks that can benefit you long-term as a business owner. Most gas station business loans may offer competitive interest rates, predictable monthly payments, and credit building.

These loans can allow business owners to invest and accelerate their growth. Keep your shelves stocks and move your business forward by utilizing a gas station business loan.

Choose First Union Lending As Your Premier Lender

At First Union Lending, we believe that small and medium-sized businesses deserve the right to access the capital they need to succeed.

Our goal is to build long-term, lasting relationships by providing business owners with what they need when they need it. We pride ourselves on being educated, knowledgeable, and caring about conducting business. We have acquired much of the same licensing traditional banks require to cement our fiduciary responsibility to our clients and work culture.

We are here to consult, help you save, and guide you and your business to success.