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The primary analysis will involve cash flow.The first thing the underwriter will look at is a cash flow calculation.Many banks will use different formulas but they all basically are looking to evaluate the same thing which is how much cash does the business generate.Mre specifically,how much cash is generated by the gas station as a ratio of the loan payment for the anticipated loan.The main question is whether the gas station generates enough money to back the loan with enough left to satisfy the borrowers needs.The financial institution will most likely use a conservative approach to create a cushion in the event of a downturn.

David Hitchcock and MortgageCerv are experts in gas station/c-store commercial financing.Give us a call.1-888-282-0601

Many times a a local bank will provide the best terms for a borrower because they may already have a deposit relationship or merchant account with the borrower,so they can offer a more attractive rate.However,most of the smaller banks do not like to lend to this asset class,plus the lack of understanding of the industry in general tend to make this not an option.

This leaves the borrower a few options:SBA or government backed financing,conventional financing,financing through a MAC program,specialty finance or self funding from cash flow,all offering distict advantages and disadvantage.We'll talk more about these advantages and disadvantages in a future post .

David Hitchcock is the President & Senior Broker of MortgageCerv.David is an expert at originating funding on gas station / c-store properties in Georgia and Nationwide.Call 1-888-282-0601 for your funding needs.

Let Sleeping Dog's "Lie"

A guy is driving around and sees a sign in front of a house:TALKING DOG FOR SALE.He rings.The owner takes him out to the backyard,where he sees a Labrador."You talk?"he asks.

"Yep",the Lab replies."When I was a puppy,the CIA had me jetting from country to country,sitting in rooms with spies and world leaders,because no one figured a dog would be eavesdropping.Now I'm retired"The guy is amazed and asks the owner what he wants for the dog.

"Ten dollars",the owner says."

"Ten dollars?Why on Earth are you selling him so cheap?"

"Because he's a frigging liar.He never did any of that stuff!"

Now lets talk a little bit about how gas prices are set.Most dealers that sell gasoline under a major oil brand set their retail price based on what their supplier charges them.When your neighborhood dealer raises his price it's usually the result of his cost supplier increasing his buying price.The price the dealer pays for the fuel may be set by his seller,the oil company or the oil companys jobber.In such a case his/her buying price is known as a dealer tank wagon price or DTW.Such a dealer is commonly referred to as DTW Dealer.

Thats it for now.We'll touch base more our next blog session on how gas prices are set.

David Hitchcock is the President/Senior Broker of MortgageCerv.David is an expert at originating funding on gas station / c-store property loans.Call 1-888-282-0601 for your financing needs.

Refinancing working capital loans and commercial mortgages is a good illustration of why small business owners have increasingly been forced to consider new commercial financing alternatives. Even though refinancing commercial mortgage loans and working capital loans is doable, small business owners should be prepared to face some unusual difficulties. For small businesses trying to deal with reduced cash flow and sales, the process of working capital loan refinancing has become much more relevant. In some situations business owners are being forced to refinance existing loans by current lenders, and in other cases they are attempting to secure additional cash. Refinancing difficulties are currently occurring with both short-term business funding and long-term commercial real estate loans. There are some business finance circumstances that will be harder to refinance. There are two scenarios that are particularly difficult to refinance, one involving SBA loans and the other business opportunity financing. The need to replace existing business lines of credit with new financing arrangements is now emerging as equally difficult. The need to revise commercial mortgage loans in which commercial property serves as collateral is a more traditional example of refinancing. Because many banks have decided to stop making commercial loans, some borrowers will need to refinance simply to replace their existing commercial mortgage. Small business owners are being forced to explore refinancing options in order to get capital from their business equity to support their business financing needs in a slow economy. As borrowers are discovering, commercial refinancing is not as straightforward as it might have been in the past for either of these cases. Two specific problem areas will be particularly challenging. One factor proving to be a refinancing obstacle is business valuation. Declining sales levels lead to reduced commercial property values because commercial appraisals often derive business value from the income approach. A second key problem impacting business loan refinancing is the lack of recent business profits. Many merchants are showing losses on recent tax returns and financial statements because of financial fluctuations. Because lenders look at cash flow to see if it is sufficient to cover debt payments, recent losses are likely to be a significant difficulty when attempting to refinance commercial mortgages and other commercial loans. Borrowers should find themselves in better shape if they realize in advance that there might not be the usual choices for business refinancing. It is likely that most businesses will need to evaluate and consider both new commercial lending sources and new business financing programs before the end of their current efforts to refinance business debt.David Hitchcock and MortgageCerv Financial provides help to small businesses and gas station property owners in Georgia and nationwide .