Using the SBA 7(a) for a Gas Station or Convenience Store
The unemployment rate in the United States has been steadily dropping since before 2010, meaning more people are driving to work and buying hot-ticket items like vehicles. But, crude oil price drops have plummeted market growth for gas stations. According to IBISWorld, two of the most important factors for the success of a gas station are:
- Location. A gas station's proximity to high-traffic areas is key to driving sales.
- Product range. Having an expanding, rotating, and wide product range will satisfy the broad customer base that a gas station serves.
Getting an SBA 7(a) loan from a bank, credit union, or other lending institution is a great way to make those factors of success happen. The SBA 7(a) loan can be used for any legitimate business purpose, including a business mortgage. Here’s a look at some of the things you can do with the loan:
- New construction of a gas station. New construction of a gas station can be expensive, but any of the costs can be covered by the SBA 7(a). These include pumps, underground tanks, POS systems, cold storage and kitchen equipment, parking lots, etc.
- Refinancing a gas station. The funds from the SBA 7(a) can be used to refinance an existing loan. There are specific conditions for the loan to be used this way. For more information, check out our page on Refinancing Debt.
- Buying an existing gas station. Gas stations are purpose-built, and you may find it cheaper to buy a vacant site rather than to build. The SBA 7(a) allows for the purchase of commercial real estate and land.
Lean More: SBA 7(a) for a Car Wash Lot
SBA7a.Loans works with business owners on other government-backed loan programs as well. The SBA 504 is another loan that's larger than the SBA 7(a). The 504 can have more favorable terms, including a lower amount down. Typically, the SBA 504 is used with a traditional loan, with the costs split between the two.