Convenience Store Business Loans

What are the best types of convenience store business loans?

Term Loans

Term loans from alternative lenders are the most versatile and fast form of financing available, and generally have lower qualification requirements than some of the other forms of financing on this list. You can apply for these term loans online and you’ll often get your funding within 3 days. Interest rates are usually between 9% and 45%, but there are outliers for those with excellent credit or bad credit.

SBA Loans

SBA loans are guaranteed by the Small Business Administration, which helps encourage lenders to lower interest rates and offer better terms. The interest rate for SBA loans is always between 2.89% and 13%, so they are always an affordable way to borrow. The downside of these loans is that they are generally more difficult to qualify for and they often take a long time to fund - up to 12 weeks.

The SBA offer three different types of loan:

• 7(a) loan program: this is their most popular type of loan and it offers funding for any business need
• 504 loan program: can only be used for large assets and real estate
• Microloan program: provides funding up to $50,000 for female-led and minority business owners

Bank Loans

Bank loans are generally the most difficult form of financing to secure, but they do offer the best rates at around 2-5%. You’ll need to have an excellent credit score, excellent business financials, and well prepared financial documents before you apply.

Equipment Loans

If you exclusively need to purchase equipment, this type of loan will likely be best for your needs. An equipment loan uses the equipment you purchase with the loan as collateral, which helps keep interest rates low. Your lender will generally need to approve the equipment you want to buy or purchase it on your behalf.

Business Line of Credit

If you’re interested in a more flexible way of borrowing, a business line of credit may be a better choice for you. This works much like a credit card but usually comes with a higher maximum credit limit and you aren’t limited to paying for goods and services with a card.

As with a credit card, the credit on a business line of credit is revolving which means you can use the credit again once you’ve repaid it. You only pay interest on the money you’ve borrowed, so if you manage your debt carefully you can avoid paying the higher interest rates that usually come with a business line of credit.

What are the pros and cons of using a convenience store business loan?

PROS

• Expand your business quickly
• Take advantage of time-limited opportunities
• Ease cash flow issues
• Low interest rates possible for those with good or excellent credit

CONS

• You usually have to provide a personal guarantee and business lien
• The best loans require high credit scores
• You may rely on it to hide a profitability issue

Can I use a convenience store business loan to purchase a convenience store?

In some cases, yes, but it is always difficult to find funding for a startup so you may need to look into alternative forms of financing if you don’t already have a successful business history. If you’re thinking about purchasing another business, look into business acquisition financing to explore all your options.

How to Qualify for a Convenience Store Business Loan

To qualify for the best convenience store business loans, you’ll need:

• A credit score of 600 or higher
• A minimum annual revenue of $50,000 - $100,000
• At least 1 year in business
• Be willing to put up a personal guarantee and business lien

Convenience Store Loan Calculator

How to Apply for a Convenience Store Business Loan

To apply, you simply need to choose a lender you want to apply to and then gather your documents. Most lenders require:

• Social security number
• 3 months of bank statements
• Details of any debt you currently have
• Business information (such as licenses)
• Business and personal tax returns
• Profit and loss statement
• Balance sheet

Different lenders and types of loan have different requirements here, so you may need more or less information than the list above.

Compare and Apply Now

A convenience store business loan can be just what you need to take your business to the next level, but the most important step is to compare interest rates so you can ensure you’re getting the best deal. It can be tempting to apply for any loan just to secure funding, but don’t forget that it needs to be affordable and as low-cost as possible. Start your search here by comparing rates of the best convenience store business loans and when you find one that suits your circumstances, click apply. You’ll soon have the funding you need to expand your business.