1. Let’s look at this from a bit different perspective.
2. What is the cash down payment to start up a gas station and do you need other collateral to be secured by the Lender?
To obtain a loan, you do not need to use all your own cash:
The “Rule of Thumb” is an SBA Lender requires 20% of the total project cost as the down payment to qualify a start-up business loan.
Example: Real Estate, Renovations, Equipment, Inventory, New Pumps total $500,000 dollars. The SBA Lender would require the Borrower to have a down payment of $100,000 dollars and the loan would be $400,000 dollars
Often the SBA Lender will require additional collateral in the form of real estate, securities or a certificate of deposit (to name a few).
The SBA Lender will want you to have at least one year of experience as the owner or manager of another gas station.
If you do not have the requisite experience, then you can have a minority partner who has the experience and will manage the day to day operations of the gas station.
Starting a business and obtaining a loan to start the business can work if you understand the requisite steps and put all the pieces of the plan and loan together.
For more information contact:
Continental Finance Capital Corporation
Tel: 617-336-3215 x 5