Picture this: You’re driving home when you realize your car needs fuel, and you could use a bite to eat. Several gas stations are ahead, but their prices are relatively the same. So, how will you choose which one to visit? The answer is the gas stations that have adapted to survive in this increasingly competitive industry.
Like many industries, the standards for a successful gas station and convenience store have recently risen significantly. Today’s gas stations must have an above-average number of pumps, an expanded convenience store selection, and an updated appearance to attract visitors. All three changes might not be so challenging to implement if it were not for gasoline sales’ notoriously low profit margins. You’d think rising gas prices would increase these numbers, but this is not true. Higher prices are more likely to steer visitors away, especially if nothing about this particular gas station makes them want to stop by.
This is where the need for additional funding comes into play. The competition will eventually eat up gas stations that lack the three aforementioned features. Even the lowest prices in town can easily overshadow outdated and/or insufficient pumps and signage.
United Capital Source has many years of experience facilitating Small Business Loans for Gas Stations & Convenience Stores. We have access to all types of business lending products.
The gas station/convenience store market has become increasingly competitive over the past few years. At least a thousand of these businesses are added every year across the US, raking in more money than supermarkets and possibly even restaurants.
According to The Florida Times-Union, 70% of the average convenience store’s revenue comes from gas, but the pumps account for just 40% of the store’s profit. The rest comes from the items sold inside the store, which are the main focus of business owners looking to evolve rapidly. Several big chains are planning to open dozens of more locations in certain states and feature a significantly larger selection of food and beverages.
In Minnesota, fourteen BP gas stations were recently converted into SuperAmericas, a franchise offering a bakery and deli. The latest Daily’s stores to be set up in Florida boast made-to-order sandwiches and a grab-and-go case with everything from yogurt to string cheese to hard-boiled eggs. Circle K based its new strategy on discovering that half of all gas station/convenience store customers enter the store for beverages. Earlier this year, you can get a fountain drink of any size at Circle K for just 79 cents.
The main takeaway here is that these businesses are now selling more than just the basics, for three reasons.
Before expanding their selections, gas station/convenience store operators were frequently visited by travelers looking for the nearest source of sufficient sustenance, like a deli or 7-Eleven. The customers had unexpectedly found themselves in a “food desert” or a major highway or neighborhood void of noticeable supermarkets and restaurants. Wisconsin-based Kwik Trip has added 35-40 stores per year over the last decade, most of which are located along the same central US roadways, such as Highway 10 or Interstate 94.
The second reason stems from the fact that gas station/convenience stores aren’t just competing with each other. They are also competing with CVS, Walgreens, Best Buy, Home Depot, and any store selling candy and drinks at the cash register. Supermarket customers may have noticed that more and more convenience-related items are now being sold upfront.
Approximately ten years ago, America began experiencing a dramatic drop in gas and tobacco sales, two of the highest-selling items at gas station/convenience stores. But alongside these declines came the emergence of the most reliable customers, one who places a much higher value on convenience stores than previous generations.
Jeff Lenard, a spokesman for the National Association of Convenience Stores, confirmed to the Florida Times-Union last March that “Millennials are the convenience stores’ best customers and [are] transforming how everyone serves them.” About 70 years ago, 55% of households consisted of married couples with children. “By the 2000s, “ Lenard continued, “married households were down to 28 percent, and singles were up to 20 percent. When you’re single, there’s less tendency to rush home and cook dinner by yourself.”
Each of these three observations poses a different reason to contact an alternative lender about a small business loan. The first suggests that, much like the restaurant industry, the quickest way for owners of gas station/convenience stores is to add more stores throughout any area deprived of traditional food sources. If there is a new ramp being built for a major highway near you, it’s up to you to capitalize on this opportunity before someone else does.
Lucky for you, alternative business financing companies like those in our lender network can approve small business loans in 24-48 hours. This allows you to quickly secure that new location with a down payment while covering your existing location’s monthly expenses. And instead of wasting time gathering and worrying about money, you can conduct research on the area, scout for new hires, and dedicate 100% of your focus towards perfecting this investment.
It’s already been established that the adoption of extensive food options is vital for survival. Still, you need to step up your game even further if your store is located within proximity of one of the aforementioned non-convenience competitors and/or a massive millennial population. In these two scenarios, your store can never have enough items or “convenience.” For example, the “Grab-and-Go” cooler at Daily’s has seen immense success simply because it doesn’t have a door. Others are experimenting with tables for eating, a wider variety of ready-to-eat food, and of course, free Wi-Fi.
Expanding or installing a selection of food and beverages takes time. You’ve got to buy a grill, refrigerators, ventilation, cooking utensils, and hire more staff to run the area. Traditional funding programs require you to make monthly payments immediately after funding is distributed, but United Capital Source clients can avoid this stress by receiving a Merchant Cash Advance. This program provides a lump sum in exchange for a percentage of future credit card sales, and since most gas station transactions are conducted via credit card, your debt will be erased by the middle of the busy season.
Demand has undoubtedly increased for food items in gas station/convenience stores, and business owners are realizing that there is always something more they could offer customers. The current mentality is to expand your reach as far as possible, so it’d be wise to jump on the bandwagon now before someone else steals your potential traffic. Besides, at this point, if you choose not to expand, you will literally be known as “the only store without ____.”
About an hour into your long drive home, you realize two things: Your car needs fuel, and so do you. Human fuel, that is. Thankfully, you’re on a busy highway, which means you are bound to run into several gas stations just a few miles ahead. So, which one do you visit? Pondering this question can help the average person understand why access to small business loans for gas stations is so crucial in 2018. As if cutthroat competition and rising standards weren’t financially challenging enough, a little research will reveal that gasoline sales have some of the lowest profit margins out of all retail businesses.
According to data reported earlier this month, once debit/credit card fees and other operating costs have been applied, gasoline sales’ net profit is approximately 3 cents a gallon. You’d think this number would go up when gas prices do the same, but this is not true. A remotely substantial price increase is actually more likely to decrease profits for station owners. Drivers have a natural tendency to attribute higher prices to individual greed and look for the best prices in the area. Therefore, station owners are more likely to lose money, partially because charging more for gas leaves less money to be spent at the station’s convenience store.
So, if higher prices aren’t going to raise profits, what else can gas stations do? The idea is to increase appeal for passing drivers in a way that logistically improves profitability at the same time. Let’s get back to that drive home. Think about which features make you more or less likely to choose one gas station over another or stop at the first one you see. The most obvious answer is particularly relevant for gas stations located on highly congested roads where drivers are too stressed out to be selective.
It’s safe to say that drivers are naturally drawn to gas stations with an above-average amount of pumps in such situations. The very sight of a large pumping area is comparable to a breath of fresh air. There is a guarantee that you’ll be able to pull right up to a pump without having to maneuver your car or wait for someone else to finish.
Additional pumps are one of many characteristics of gas stations that are adapting to a changing market. These stations also understand the importance of appearance, which can easily overshadow competitive prices. One station might charge less than another gas station just down the street. The second station, however, has a much more up-to-date appearance.
Its elevated sign might be bigger, or maybe its convenience store does a better job of seeming like a legitimate shop, as opposed to the last resort for sustenance. The pumps have been upgraded as well and now play the news on small screens. An up-to-date appearance suggests that the station’s convenience store doesn’t just sell junk food, which is not exactly conducive for long drives in which you must remain comfortable and alert.
The items you choose to sell at your gas station’s convenience store should be based on the other food service businesses in your immediate vicinity, along with your target demographic. Some gas stations are located in “food deserts,” or areas that lack supermarkets or restaurants. Others might be in busier areas that lack a more specific item, like breakfast food or cold cuts. The addition of a deli counter or equipment for cooking eggs could dramatically increase customer activity by making the need for gas less of an inconvenience.
When people know that gasoline is the only thing they’ll be getting at your gas station, they will only stop by when their tanks are almost empty. Knowing they can also grab a turkey sandwich or bacon, egg, and cheese, on the other hand, makes people more likely to stop by more often.
United Capital Source’s lender network offers numerous types of small business loans for gas stations looking to upgrade their services and/or appearance. Since most gas station customers pay via debit or credit card, we typically recommend a merchant cash advance, aka business loan against credit card sales. Instead of manually making fixed payments every month, payments are deducted from debit and credit transactions. This system is advantageous for long-term investments or changes to your business that do not immediately increase revenue.
If the business is slow or stagnant, payments wouldn’t be high enough to damage profits. The majority of the debt would instead be paid off when sales volume increases. And since the purpose of adding pumps and expanding convenience store options is to boost daily revenue, profits will have at least begun to rise by this time. It’s important to note that we are well-aware that you’re going to need more staff to operate more pumps and/or a cooking station. The cost of part-time employees can most certainly be factored into the borrowing amount and terms of your small business loan.
The standards for a successful gas station and convenience store are changing. But station owners should be thankful that unlike other industries, most of the changes required for success are pretty clear: bigger is better. The funding experts at United Capital Source keep this in mind when they negotiate gas station business loans. Terms can be customized to suit these goals, and we are fully capable of approving multiple rounds of funding for each improvement on the horizon. As long as revenue remains steady, there is virtually nothing your competitors have that you can’t.
Many gas station visitors pay via debit or credit card, which makes them perfect candidates for a merchant cash advance, a.k.a credit card factoring. This type of working capital loan supplies a lump sum in exchange for an agreed-upon percentage of future debit and credit card sales. Rather than making fixed payments every month, no matter what, substantial payments are only made when sales volume is on the rise.
Merchant cash advances are, therefore, highly advantageous for long-term investments or changes to your business that might take a few months to increase revenue.
One of our clients owns and operates a gas station and convenience store in upstate New York. He came to UCS after realizing that his customers would often ask for directions to the nearest deli. If he could supply the items they were looking for, these customers would have bought from him instead of leaving.
With the merchant cash advance’s help, our client removed a section of auto accessories and installed a 12-foot deli counter with a multi-purpose grill. We made sure he received enough funds to purchase the required equipment and hire an experienced cook to serve his frequently-hungry customers. The same logic would likely be applied for a client who wanted to add more pumps, which might require more workers to operate them.
Another reason merchant cash advance may be the right business loan for your gas station is the industry’s seasonal nature. Gas stations do a lot more business when driving conditions are favorable. But to ensure a strong, busy period, you must prepare in the months beforehand. A merchant cash advance takes negligible payments during slow months. Therefore, borrowers can make investments when business is slow and then pay off the majority of the debt when there are more cars on the road the following season.
This is just one of many business loans that could work for your gas station. In fact, gas stations may be suited for multiple options because the funds are usually used to increase or stabilize daily revenue. When there is a high likelihood of this outcome, making payments will not prevent profits from increasing. Apply now to see how much you qualify for!
Before considering business loan options, the first question to ask yourself is: Should I expand my gas station or convenience store?
The gas station/convenience store market has become increasingly competitive over the past few years. At least a thousand of these businesses are added annually across the US, raking in more money than supermarkets and possibly even restaurants.
Convenience store owners often require quick and convenient funding to make the necessary upgrades. Gas station financing can enable you to modernize fuel systems or add alternative energy options like EV chargers. It can also help revitalize an existing gas station or expand your gas station properties.
That’s why gas station loans typically come in the form of:
According to The Florida Times-Union, 70% of the average convenience store’s revenue comes from gas, but the pumps account for just 40% of the store’s profit. The rest comes from the items sold inside the store, which are the primary focus of business owners looking to evolve rapidly. Several big chains plan to open dozens more locations in certain states and feature a significantly larger selection of food and beverages.
In Minnesota, fourteen BP gas stations were recently converted into SuperAmericas, a franchise offering a bakery and deli. The latest Daily’s stores to be set up in Florida boast made-to-order sandwiches and a grab-and-go case with everything from yogurt to string cheese to hard-boiled eggs. Circle K based its new strategy on discovering that half of all gas station/convenience store customers enter the store for beverages. Earlier this year, you could get a fountain drink of any size at Circle K for just 79 cents.
Before expanding their selections, gas station/convenience store operators were frequently visited by travelers looking for the nearest source of sufficient sustenance, like a deli or 7-Eleven. The customers had unexpectedly found themselves in a “food desert”, or a major highway or neighborhood void of noticeable supermarkets and restaurants. Wisconsin-based Kwik Trip has added 35-40 stores per year over the last decade, more located along the same central US roadways, such as Highway 10 or Interstate 94.
The second reason stems from the fact that gas stations and convenience stores aren’t just competing with each other. They also compete with CVS, Walgreens, Best Buy, Home Depot, and any store selling candy and drinks at the cash register. Supermarket customers may have noticed that more convenience-related items are now being sold up front.
Approximately ten years ago, America began experiencing a dramatic drop in gas and tobacco sales, two of the highest-selling items at gas stations/convenience stores. But alongside these declines came the emergence of the most reliable customers, those who place a much higher value on convenience stores than previous generations. Gas station owners can utilize loans to implement advanced technology, enhancing operations and customer experiences.
Jeff Lenard, a spokesman for the National Association of Convenience Stores, confirmed to the Florida Times-Union last March that “Millennials are the convenience stores’ best customers and [are] transforming how everyone serves them.” About 70 years ago, 55% of households were married couples with children. “By the 2000s, “ Lenard continued, “married households were down to 28 percent, and singles were up to 20 percent. When you’re single, there’s less tendency to rush home and cook dinner by yourself.”
Financing options can help enhance curb appeal through renovations and improved signage. Alternative lenders can provide funding for gas stations with more flexible approval requirements than traditional lenders. Alternative business financing companies like those in our lender network can approve small business loans quickly to provide gas station funding.
This lets you quickly secure that new location with a down payment while covering your existing location’s monthly expenses. Instead of wasting time gathering and worrying about money, you can research the area, scout for new hires, and dedicate 100% of your focus to perfecting this investment.
Financing can cover operational expenses such as payroll, inventory, or marketing. Gas station and convenience store owners can access diverse financing options to fuel their growth and gain a competitive edge.
Many gas stations are adapting to technological advancements by incorporating electric vehicle charging stations and offering alternative fuel options. In addition, you may want to upgrade equipment inside the store to expand food services and options.
Expanding or installing a selection of food and beverages takes time. You’ve got to buy a grill, refrigerators, ventilation, cooking utensils, and hire more staff to run the area. In these cases, equipment financing could provide the necessary funding to purchase equipment. Equipment financing helps owners buy or lease essential equipment such as fuel pumps and refrigeration units.
Gas stations typically process a high volume of transactions, making them ideal candidates for funding from alternative lenders. These working capital loans supply a lump sum in exchange for an agreed-upon percentage of future debit and credit card sales. Rather than making fixed payments every month, no matter what, substantial payments are only made when sales volume is on the rise.
Merchant cash advances are, therefore, highly advantageous for long-term investments or changes to your business that might take a few months to increase revenue. Another reason a merchant cash advance may be the right business loan for your gas station is the industry’s seasonal nature. Gas stations do a lot more business when driving conditions are favorable. But to ensure a strong, busy period, you must prepare in the months beforehand. A merchant cash advance takes negligible payments during slow months. Therefore, borrowers can make investments when business is slow and pay off most of the debt when more cars are on the road the following season.
Another way many small business owners in the gas station industry compete is to add new locations. A commercial real estate loan program can help you acquire the necessary land. Commercial real estate loans can support property purchases, refinancing existing loans, or large-scale upgrades for gas stations.
Consider a business line of credit if you want more options when updating your gas station or convenience store. Business lines of credit offer flexibility, allowing gas station owners to draw funds as needed for unexpected repairs.
Well-established business owners with good credit could consider the SBA loan program, which the Small Business Administration backs. The maximum loan amount for an SBA 7(a) loan for a gas station or convenience store is up to $5 million. The SBA 7(a) allows for commercial real estate and land purchase.
The SBA 7(a) loan program offers lower interest rates and longer repayment terms than traditional real estate financing. The repayment terms for an SBA 7(a) loan are up to 25 years for real estate and up to 10 years for equipment and working capital. To be eligible for an SBA 7(a) loan, borrowers must have a great credit score and little existing debt and demonstrate the ability to repay the loan. The SBA 7(a) loan can be used for any legitimate business purpose, including a business mortgage.
| LOAN TYPES | MAX AMOUNTS | RATES | SPEED |
|---|---|---|---|
| Merchant Cash Advances | $7.5k – $1m | Starting at 1-6% p/mo | 1-2 business days |
| SBA Loan | $50k-$10m | Starting at Prime + 2.75% | 8-12 weeks |
| Business Term Loan | $10k to $5m | Starting at 1-4% p/mo | 1-3 business days |
| Business Line of Credit | $1k to $250k | Starting at 1% p/mo | 1-3 business days |
| Receivables/Invoice Financing | $10k-$10m | Starting at 1% p/mo | 1-2 weeks |
| Equipment Financing | Up to $5m per piece | Starting at 3.5% (SBA) | 3-10+ business days |
| Revenue Based Business Loans | $10K – $5m | Starting at 1-6% p/mo | 1-2 business days |
Running a gas station with an attached convenience store comes with unique challenges, from volatile fuel prices and seasonal fluctuations to ongoing equipment maintenance and unexpected repair costs. Gas station and convenience store business loans provide the financial support needed to navigate these demands and position your business for long-term success.
One significant advantage is improved cash flow management. Seasonal slowdowns, rising wholesale fuel costs, or unexpected dips in foot traffic can strain your finances. A business line of credit gives you access to working capital when needed, helping you maintain operations without disruption. For owners looking to modernize their equipment—whether it’s fuel pumps, refrigeration systems, or point-of-sale technology—equipment financing offers a practical way to spread out the cost of upgrades over time while staying competitive.
Expansion is another common goal among gas station operators. Whether adding services like a car wash, expanding your convenience store selection, or purchasing a second location, business term loans and SBA loans offer the funding needed to grow. And when urgent repairs arise, such as a malfunctioning pump or refrigeration issue, alternative business loans can deliver funds quickly, often within a day or two, minimizing downtime and lost revenue.
With flexible loan products tailored to your unique needs, gas station and convenience store financing empowers you to solve challenges, invest in your business, and confidently seize growth opportunities.
While business loans can be a powerful tool for growth and stability, they may also come with challenges that gas station and convenience store owners should carefully consider before borrowing.
One of the primary drawbacks is cost. Interest rates and fees can vary significantly depending on the type of financing you choose and your credit profile. Short-term funding options like merchant cash advances or revenue-based financing often carry higher costs, which can impact your margins if not managed properly.
Collateral requirements are another consideration. Some loan products, particularly SBA or larger term loans, may require you to pledge business or personal assets. This added risk means you must be confident in your repayment plan and cash flow projections.
Additionally, service stations are highly regulated businesses that deal with environmental compliance, fuel pricing fluctuations, and competitive pressures. Taking on debt during a volatile market or low-demand season could strain your finances further if revenue doesn’t increase as expected.
Finally, time and documentation can be hurdles, especially with traditional loans. SBA and bank loans may offer favorable rates but often involve lengthy application processes and strict eligibility requirements, which could delay access to funds when you need them most.
Understanding the benefits and potential drawbacks will help you make a more informed decision and choose the right financing option for your gas station or convenience store.
Pros
Cons
The amount of paperwork required depends on the product you choose. Funds can be approved and distributed for most products within 1-3 business days. Here’s how to apply
The first step is choosing the most sensible solution to the problem at hand. This should require some research, as each product is designed for different types of expenses and cash flow cycles. Are you looking to cover a short-term or long-term expense? Is demand expected to increase or decrease in the coming months?
Considering the funds’ purpose will also help us determine the correct borrowing and terms for your needs.
Here are the documents and information required for Gas Station & Convenience Store Loans:
SBA Loans require additional documents and information, such as financial statements. To learn what’s needed for the SBA-backed loans, visit our SBA Loan page.
You can begin the application process by calling us or filling out our one-page online application. Either way, you’ll be asked to enter the information from the previous section along with your desired funding amount.
Once you apply, a representative will contact you to explain the repayment structure, rates, and terms of your available options. This way, you won’t have to worry about any surprises or hidden fees during repayment.
If you’re approved, we’ll contact you within 24 hours. After closing, funds for most business financing products should appear in your bank account within 24 hours to one week.
Your business loan isn’t just a way to get financing for your business. It’s also an excellent opportunity to start building (or improving) your credit.
Regardless of the type of business loan you get, make all your required payments on time and in full. If you get a business credit line or another form of revolving credit, keep your balance below the credit limit.
Consistently making your business financing payments on time and in full will positively impact your credit. And that means preferred rates and terms when you next need business financing.
If your application is declined, it’s possible that you applied for the wrong product to meet your cash flow needs. We would likely recommend a different product with a less hazardous repayment structure in this case.
Your application might also be declined if it is determined that you cannot afford to take on more debt.
If your credit score is holding you back from accessing financing, consider working with a reputable credit repair service to raise your scores.
Many existing business owners face difficulty obtaining traditional bank loans for gas station operations due to specialized property type and credit rating issues. Many traditional lenders consider gas station loans high risk due to unpredictable income and thin profit margins. More stringent requirements for financing gas stations can include proving cash flow to cover loan payments and the owner’s salary.
Traditional lenders, such as banks and credit unions, require small business owners to jump through several hoops. They require proof of financial stability and extensive financial projections.
Gas stations often experience higher rates of loan application rejection from conventional banks compared to other business types. Fortunately, alternative and online lenders usually meet this market need by providing more accessible loan applications with less stringent requirements.
Yes, SBA and Business Term Loans are suitable for purchasing or expanding gas station businesses, offering substantial funding with competitive interest rates. However, you may need to apply through an alternative lender. Most traditional lenders consider gas stations high-risk due to predictable income and thin margins. They’ll want to ensure the financial health of your business plan.
Securing financing for your first gas station, convenience store, or retail outlet is often much more challenging. Seller financing might be an option if you’re looking to purchase an existing gas station.
Funding speed varies by product: Merchant Cash Advances and Business Lines of Credit can fund within 1–3 business days, while SBA Loans may take 8–12 weeks.
United Capital Source provides financing options for business owners with less-than-perfect credit. Products like Revenue Based Financing, Merchant Cash Advances, and Business Lines of Credit are designed to accommodate various credit situations.
Fraud Disclosure:
Please be aware that individuals have been fraudulently misrepresenting to business owners (and others) that United Capital Source, Inc. (“UCS”) can assist small businesses in receiving government grants and other forgivable business loans, when in fact those grants or loans do not exist or are not available. These individuals have ulterior motives and are engaging in the unauthorized use of the names, trademarks, domain names, and logos of UCS in an attempt to commit fraud upon unsuspecting small business owners.
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