Hello, I am trying to find out about obtaining a commercial loan for a gas station.
First off I would be doing this with my brother.
My credit score is currently in low to mid 600's. I am in the process of paying off all of my loans aside from my truck. I did one for those "simulators" and it says my score should jump to just under a 700(I don't if they acurate).
My brother's score is probably right around a 700 right now.
We do not have anything negative(severe) on our history. I may have a 30 day or 2, that is all.
We do not have financial documents to disclose.

The gas station is for sale for $425,000 real estate included.

Property has had a Phase I done. No Phase II(Is that required?)
Tank replacement may be needed in the future, sooner than later. 20yrs old, had a 30yr guarantee.
Maybe an upgrade to the pumps as well.
Has been closed since Feb. of this year.
I had someone do some research for me and they were purchasing 32,000 gallons a month.
I would be bringing my current auto repair business into the 3 bays they have there.
Would also do a little bit of sales of soda and snacks.

Any advice would be greatly appreciated. Also if anyone can point me in a direction to go about getting a loan that would be appreciated. Thank you, Mat Visci

Wantastation,
I have a few more questions, but may be able to point you in the right direction.
Call or e-mail me with the details and I may be able to advise.

You will most prob end up with an SBA loan. IF the phase I is recent and came out clear then you should be ok assuming the tanks are fiberglass and not old metal ones. You will need to start putting together your financials, the business's financials & projection (a basic business plan). You need to get your hand on business financials. If the seller lost them, get him to sign an IRS 4506 and have his returns pulled from the IRS. If there is nothing avail, it will make your financing a real pain. You will have to rebuild financial history using related variables such as gas deliveries from distributor etc to calculate gallons sold etc. Branded stations/brandes gas is easier to finance than non branded. Gas station financing is not like standard real estate in terms of speed. It will take 6-10 weeks from start to finsh and the rate that you can expect will be based on prime. Hope that helped! If you need anymore info, shoot me an email! Naj

The key is to get the last two or three years business tax returns from the seller along with interim financial statements for 2006. Without those, as the previous post mentioned, getting a loan is going to be very difficult. Also, read through the Phase 1 report to make sure the property is clean. If it is contaminated, getting financing is going to be difficult again.

Mr. Visci,

You may be able to purchase the property but first there are some fundamental questions that need answer.
1. How much money will you put down? Lenders want borrowers to put skin in the game.
2. What is your experience running gas stations or running a business in general?
3. Some lenders (especially the ones with SBA guaranteed loans) want collateral (properties, primary house, etc.) Do you have collateral?
4. Do you have proof of the historical numbers from when it was open? Otherwise it may be considered a start up.
5. You mention a 2 30 lates. Are they on a mortgage? How long ago?
6. You will need a business plan including future cash flow projections. Do you have one?
7. Are there any environmental problems? (usually you could check with the gov entity regulating the gas station business in your area.
8. How long have you had your auto business? Can you show a strong NOI? There are lenders that will lend up to 100% for an owner occupied or up to 90% on stated income. As you probably figure, it's not easy to qualify for these loans but it's been done.
If your auto business it's not too strong, please read below;
9. What is your net worth? How strong is your net income currently? (until you put it in working order, you may have to show that there is enough in the bank to support the carrying costs...unless you find a lender who will finance them ....there are some but the deal needs to be really strong. Also you need to show 3-6 mo reserves in operating expenses.

These are only a few questions to start with and there will be more:))

All in all, every commercial loan is different. The stroger the deal, the better the terms.

I hope this helps.