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Service stations and convenience stores cost a lot to maintain. The gas pumps, tanks underneath, and the store inside all require regular working capital.
There are 151,975 convenience stores in the U.S., and 63% of those stores are owned by a company that has 10 or fewer stores. Most owner-operators don't have the cash to cover all of those costs up front. That's where gas station financing comes in. Financing helps you cover business expenses without eating your cash flow.
I've worked with service station operators across the U.S., and the hard part is picking the right financing for your business. Below, I cover financing types, what a station costs, and the costs that catch buyers off guard.
| Financing option | Funding speed | Amount | Rate |
|---|---|---|---|
| SBA loans | As fast as two weeks, typically 30 to 90 days | Up to $5 million | Starting at 6.75% |
| Equipment financing | 1 to 5 days | Up to 100% of equipment value | Starting at 6% APR |
| Business line of credit | As fast as same day | Up to $5 million | Starting at 6% APR |
| Short-term business loan | As fast as same day | $10,000 to $5 million | Starting at 6% APR |
| HELOC | As fast as one week | Up to $750,000 | As low as prime |
| Merchant cash advance | As fast as same day | Up to $5 million | Factor rate 1.08 to 1.45 |
Types of Gas Station Financing
The right type of financing for your service station depends on the need you're filling. Below, I cover the options available through Clarify Capital's lender network.
SBA loans
These loans are backed by the U.S. Small Business Administration (SBA) and underwritten by approved lenders. Repayment runs 10 to 25 years. SBA loans can be used to finance a gas station acquisition.
Equipment financing
Covers up to 100% of tanks, canopies, point-of-sale systems, and dispensers. The equipment serves as collateral. Terms run 12 to 72 months.
Business line of credit
A revolving credit line used for fuel deliveries, inventory, and payroll. Repayment terms up to 36 months. You only pay interest on what you use.
Short-term business loan
A lump sum with a fixed repayment term. Finance $10,000 to $5 million with terms up to 36 months. Use it to bridge a gap in financing.
Home equity line of credit (HELOC)
A revolving credit line based on the equity in your house. Your home secures the line.
Merchant cash advance
An advance on future sales priced at a factor rate. Repaid on a daily, weekly, or monthly repayment schedule.
Minimum Qualifications
$10,000 in monthly revenue
Your business must earn at least $10K per month in a business bank account.
500+ credit score
You can get approved with any credit score. But the better your credit rating, the better interest rates lenders offer. Your FICO score should be above 500.
Minimum six months in business
Your company should be operational for a minimum of six months. This shows business lenders that your company is sustainable and won't go out of business.
Have a business bank account
Your Clarify advisor will need three or four months of your most recent bank statements to verify income. This is just to see you're actually making $10K+ month in revenue.
How Station Operators Use Financing
Your options aren't limited to the ones below, but these are the most common requests I see from service station operators.
Buying an existing service station. A business acquisition loan or an SBA 7(a) loan often fits here.
Building a new service station. You'll need to consider construction costs, in addition to the cost of land, tanks, canopy, pumps, and a storefront.
Replacing or upgrading tanks and pumps. Equipment financing typically covers a tank or pump upgrade.
Expanding the c-store. Commercial real estate financing can help with the expansion. Equipment financing lets you expand your foodservice offerings.
What It Costs To Open or Upgrade a Station
Opening a new gas station costs anywhere from $250,000 on the low end to several million dollars. Costs typically depend on the size, location, and complexity of the station. You can also choose to contract with a major fuel company, like BP or Mobil, or open an unbranded gas station.
No matter what route you take, here are some costs to consider.
Fuel dispensers and pumps
$80,000 to $300,000
Permits, licenses, and regulatory fees
$5,000 to $25,000
Underground storage tanks
$100,000 to $400,000
Canopy
$40,000 to $120,000
Signage and branding
$10,000 to $50,000
Environmental compliance and assessment
$10,000 to $50,000
SBA Loans for Gas Stations
SBA financing is a common path for buying a service station. Terms are long, and you can borrow up to $5 million through the SBA 7(a) program and up to $5.5 million through the 504 program.
Through Clarify Capital's network, you can access APRs as low as 6.75% with no down payment required. Collateral is sometimes required, depending on the loan size and program. To qualify, you need a minimum credit score of 640 and at least two years of operating history.
Underground Storage Tanks and Environmental Costs
Underground storage tanks get expensive quickly. The Environmental Protection Agency's (EPA) underground storage tank regulations provide the standards for operator training, equipment testing, and inspections. If you miss one of these requirements, you could end up paying up to $29,980 per tank per day. States also charge penalties on top of the EPA's fees.
When it's time for a new tank, Equipment financing covers tank and dispenser replacement. On a $180,000 tank and pump job at an APR of 10%, five years will cost $3,824 a month. Bump it up to six years, and that cost drops to $3,335.
Gas Station Financing for Different Types of Stations
Depending on the type of station you're trying to finance, lenders weigh your application differently.
Branded stations. Well-known brands like Shell or Chevron have you sign a fuel-supply agreement. This sets your fuel cost, volume commitments, and branding requirements. Lenders view brand affiliation as lower risk.
Independent stations. You don't have to sign a supplier agreement, which gives you more control over the service. The trade-off is that lenders look harder at the station's credit history without brand support.
C-store sites. Lenders underwrite stations with a convenience store differently. Food service often helps carry the profit when fuel margins are thin.
What Lenders Review
Lenders have their own requirements, but they're all looking at the same things.
Station cash flow
This includes fuel volume and in-store revenue
Personal credit score
A higher credit score often qualifies you for better interest rates and repayment terms
Time in business
The longer your service station has been in operation, the stronger your application is viewed by lenders
Loan amount and equity
Typically, larger loans are reviewed more closely than smaller ones. A larger down payment reduces the total amount that needs to be financed by a loan
Collateral
Real estate and equipment serve as collateral
Environmental history
Lenders review any open cases and current compliance records
Tips for a Stronger Application
There are a few reliable things you can do to improve your chances of approval. Here's what I tell my clients.
Clean up the books. Prepare a few months of bank statements and tax returns before applying.
Separate fuel and in-store revenue. Fuel and food service carry different margins and risks. Lenders want them separated. Have a business plan ready for both.
Get ahead of underground storage tank issues. Review compliance records, testing history, and any open cases.
Know your credit score. Pull your credit report and correct any errors. Reduce your overall debt.
Not having a perfect credit score doesn't disqualify you from financing. Our bad credit financing guide goes into more detail on your options.
Finance Your Next Service Station With Clarify Capital
You don't need a perfect credit score to land gas station financing. Clarify Capital's network of 75+ vetted, reputable lenders works to put your deal in front of options ranging from SBA financing to equipment financing.
When you're ready to see what you qualify for, apply today. Checking your options won't affect your credit score.
Frequently Asked Questions on Gas Station Financing
Here are straight answers to the most common questions on gas station loans.
How Hard Is It To Get a Loan for a Gas Station?
It's harder than a standard retail loan but not impossible. Lenders weigh the service station's cash flow, your credit score, equity, and the site's environmental record.
How Much Is the Monthly Payment on a $50,000 Business Loan?
It depends on your interest rate and repayment term. At 10% over two years, the payment is about $2,307. The same loan over 10 years drops to a monthly payment of $661. However, you'd pay more interest over the life of the loan.
Can I Get an SBA Loan To Buy a Gas Station?
Yes, SBA 7(a) is a common route for a service station purchase. Finance up to $5 million, and plan on 30 to 90 days for financing, plus time for environmental review.
How Much Does It Cost To Buy a Gas Station?
It depends. Opening a gas station can cost anywhere from $250,000 to over $2 million. Fuel volume, in-store sales, brand, and underground tank condition all contribute to the overall cost.
How Much Do Gas Stations Make?
The average annual revenue for a sole proprietorship gas station is about $1.3 million per year, though revenue fluctuates depending on gas prices.
How Does Clarify Protect My Data?
Clarify follows SOC 2 security principles. Your application information stays protected throughout the process, and checking your options won't affect your credit score.
Bryan Gerson
Co-founder, Clarify
Bryan has personally arranged over $900 million in funding for businesses across trucking, restaurants, retail, construction, and healthcare. Since graduating from the University of Arizona in 2011, Bryan has spent his entire career in alternative finance, helping business owners secure capital when traditional banks turn them away. He specializes in bad credit funding, no doc lending, invoice factoring, and working capital solutions. More about the Clarify team →
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