Using the SBA 7(a) for a Gas Station or Convenience Store

According to IBISWorld, two of the most important factors for the success of a gas station are:

1. Location. A gas station's proximity to high-traffic areas is key to driving sales.

2. Product range. Having an expanding, rotating, and wide product range will satisfy the broad customer base that a gas station serves.

Using an SBA 7(a) Loan for a Gas Station

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

Other SBA Financing Options

SBA 7(a) Loans can help borrowers with a variety of SBA loan types, including the SBA 504 loan. The 504 loan can offer larger amounts than the SBA 7(a) loan, typically requires lower down payments and has lower interest rates. SBA 504 loans actually consist of two different loans, one which is financed by a Certified Development Company (CDC), and one which is offered by a traditional lender.

Case Study: Buying a Boca Raton Gas Station

Steve, a determined entrepreneur in Boca Raton, Florida, had been working in the retail industry for several years and was eager to venture into a new, profitable business opportunity. After conducting thorough research, he decided that owning and operating a gas station would be an ideal investment.

However, purchasing a gas station would require a significant amount of capital. Steve began looking into financing options to cover the acquisition cost. He initially approached traditional lenders but found that they were hesitant to finance a gas station due to the perceived risks associated with the industry.

Not one to give up easily, Steve continued to explore alternative financing options and discovered the SBA 7(a) loan program. He realized that the SBA 7(a) loan would be a perfect fit for his needs, as it could provide the necessary funds for the gas station acquisition at a low, fixed rate with favorable repayment terms.

Steve approached a bank experienced in SBA lending and presented his business plan, financial projections, and other required documentation. The bank was impressed by his preparedness and dedication to the project and approved an SBA 7(a) loan for $1.2 million to finance the gas station purchase.

With the SBA 7(a) loan, Steve successfully acquired his first gas station and started operating it. The gas station quickly gained a loyal customer base due to its competitive pricing and excellent customer service. Steve's entrepreneurial journey was off to a promising start, and he began considering further expansion in the future.

This is a fictional case study provided for illustrative purposes.

What Should I Do Next?

If you have your business plan laid out, your next step is to get the best financing you can find. Fill in the form below, and we'll connect you with the right financing tools to get your business moving.

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