How Do You Finance a Gas Station?

Gas Station Singapore

Today, to finance gas stations, or even convenience stores, together with other petroleum-related properties turned out to be a difficult task. As a matter of fact, it has become a struggle for many. Defaults and foreclosures may just transpire to anyone. They may happen to those who will not be careful. Since this is the case, most operators and dealers have to ensure that they earn an industry experience. It will help.

To have a direct industry experience may cover those who own, operate or manage a gas station. The truth is this – there are many finance people out there who do not aspire to look for attorneys, accountants and IT professionals who are just found in retail as a whole. Since there has been a current credit crunch together with the booming of the C & G or convenience and gas industry, it is not surprising how financing an asset class turned out to be quite a challenge.

Making it Succeed

If you want to put up your own gas station, but your only relevant experience is that you have worked at 7-eleven, that is not going to be effective because it is not related to any managerial experience. The usual scope is ordering inventory, hiring and firing, pricing inventory, pricing fuel and payroll. Meaning, if you have not managed ever, your chances of winning a loan can be small. This is true in today’s field.

Now, the big question is – what are your choices as you intend to purchase a gas station or even franchise one? These are some that you have to consider:

  • The most obvious answer is that you add a partner for a direct industry experience. Do not get this wrong. It does not mean that you are to make a 50/50 partnership. It only shows that you might have to be with someone who can be responsible for running a business.
  • Usually, it is the best to keep the seller only on a minority owner. He or she may take 20% or less for a period of time. This is a chance so that you can get the most of your cash. Aside from this, training for like a year can be possible. This will be good for your business.
  • If the company you are to take only has a management, and then you might want to keep that. That is another way to hold everything going. It might even come to a point when you will be obliged to offer ownership for around 5 to 10%. There are times when a manager does not come with a financial motivation so that he or she might stay. If ownership is present, and so the incentive is as well. You are just not required to have the direct experience. You may obtain it from other people.

Do not fail to do your own research even before anything else. This must help you with everything. Review all of these in order to work.