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The tanks decide this deal, not the pumps.
Financing for gas stations and convenience stores in Indiana. The environmental work starts before the loan does, and it is usually what sets the timeline.
What actually holds these up.
A c-store deal is three things at once: real estate, a business, and an environmental liability. Lenders underwrite all three, and the third one is what turns a 60-day close into a 120-day close.
Underground storage tanks
Indiana regulates USTs through IDEM’s Storage Tanks program. A lender wants the tank age, the material, the upgrade and leak-detection status, and the registration history before it wants your tax returns. Fiberglass tanks installed in the last twenty years are a different conversation from steel tanks nobody has records for.
Phase I, and then possibly Phase II
Almost every lender orders a Phase I environmental site assessment on a fuel property. If it flags a recognized environmental condition, you are into a Phase II with soil borings and groundwater sampling, which adds weeks and cost. Budget for the possibility rather than being surprised by it.
It is a special-purpose property
A gas station is hard to convert to anything else, so lenders treat the collateral as thinner than an equivalent-value office or retail building. Expect a larger down payment than a general-purpose property. On an SBA 504, a special-purpose building raises the borrower injection, and a first-time operator buying one raises it again.
Fuel supply and branding
A branded supply agreement carries obligations that outlive the sale, including volume commitments and image requirements that can mean required canopy or dispenser work. Lenders read the supply agreement. So should you, before you sign a purchase agreement.
The cheapest station is usually cheap for a reason that shows up in the Phase I.
We would rather tell you on day one that a property has an open IDEM file than have an environmental consultant tell you in week six. If you are looking at something, send the address before you write the offer.
The SBA rules on a station purchase are stricter than most people expect, and two of them can stop a deal outright. We set them out in buying a gas station: four things in the file that stop these deals.
What to have ready.
- The purchase agreement, and the asking price broken into real estate, business, and inventory
- Tank records: age, construction, last tightness test, leak detection method, IDEM registration
- Any prior Phase I or Phase II reports, even old ones
- Three years of fuel volumes and inside sales, separated
- The fuel supply agreement, and any franchise or branding agreement
- Personal tax returns for the last three years, all pages
- Business tax returns for the last three years, all pages
- Business bank statements for the last three to six months
- Year-to-date profit and loss, a balance sheet, and a current debt schedule
- A personal financial statement for each owner
- Valid photo identification for each owner, and your entity documents