Things That Lenders Consider Before Making Gas Station Loans
A gas station is both a profitable as well as a risky business
. It is profitable because fuel being valuable is highly priced. Moreover, it is absolutely compulsory in our everyday life as fuel provides the energy for conducting daily activities. When it comes to automobiles, it is not possible to see vehicles plying on roads and commuting passengers if there is no supply of fuel. So, the gas filling grounds are where the vehicles can fill their tanks and move on. Gas stations sometimes become a risky operation because there may be leakages that need to be fixed and the station often repaired. Also, the profit margin on Gas Sales sometimes falls depending on international oil price fluctuations. So, this adds to the risk.What financers look into before offering business loans for gas station to business owners are described as under:-
Age of Station The age of the filling ground is significant and there is the need to conduct sustainability tests if its tank is old. For this reason, experts are asked to check the durability of a filling tank and find out for how many more years it is going to last. Depending on its strength, the financer decides on the fund amount that can be granted to the station owner. Generally, the small business loans extended to the station owner is large enough for an entrepreneur to make huge investments and earn profits. In this Christmas season, lenders are offering more loans.
Monthly Gallonage A station should maintain a consistent average gallonage every month. Based on the gallonage of a filling ground, the lender can assume the profit that it makes every month. So, then the financer gives out requisite funds to the owner and allows the Gas filling platform to function normally and to fulfill all its requirements.
Fuel and Repairs The filling platform should not just be a fuel rendering place. It should also have repairing services related to the automobile industry. For example, it can have a gear repair zone and a tyre repair zone. This will inevitably bring more profits and vehicle drivers will love to visit the filing ground because their repairing needs will also get fulfilled simultaneously. So, drivers can become carefree for the rest of the day.
Card Readers and ATM facility Commuters normally do not like to pay for gas charges in cash. They like to make payments using their cards. This is specifically true for daily commuters who pay an everyday visit. For others, there should be an ATM facility so that incase they run short of cash then the cash can be withdrawn from the ATM counter. These are considered basic facilities nowadays and visitors expect to find the facilities in stations.
Owned Or Leased Land The land on which the Gas station is constructed should be owned by an entrepreneur. However, if it is not self-owned, then it should be at-least a leased property. Based on the land type, the owner can apply for Gas Station Loans from a suitable financer. The volume of grant amount is decided by the financer based on the station type.
by: Raj Tulsan