How do buyers usually finance a gas station purchase?

A gas station is a business, a property and a set of equipment in one purchase, and lenders look at each part. If you are planning to buy one, it helps to know how the money is usually put together before you make an offer. This page describes common practice only. Each lender sets its own terms, and your lawyer and accountant should review any structure you choose.

The usual mix

Most purchases draw on several sources. A term loan from a bank or another lender may form a large part. Your own cash comes next, and lenders generally want to see that you have put real money in. Some sellers agree to take part of the price over time, called a vendor take-back. If the station is branded, ask whether the fuel company offers any dealer support to a new operator.

Land included or leased

When the sale includes the land and building, a lender may take them as security; ask your lawyer how that works. When the site is leased, the lender is mostly lending against the business, and the lease terms matter a great deal. Ask early which situation applies, because it shapes everything that follows.

What a lender will ask for

• Recent financial statements, with fuel and store results shown separately.
• The supply agreement, if there is one.
• Tank and site assessment reports.
• Your own experience, plan and personal financial information.

Why no money down rarely works

If an offer promises a purchase with nothing of your own, ask what it leaves out, such as costs or terms. Ask your lender what cash contribution it expects. For more, see what a buyer’s lender will want to know about a gas station and how much cash you need to buy a business.