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Old 03-12-2008, 02:11 AM   #1 (permalink)
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Need financing/capital to purchase an established Gas Station

Hello Everyone,

For starters, let me tell everyone about myself. I recently graduated from a high ranking university and started working for a large accounting firm as a business process improvement consultant. While in college, I had a small internet business running that paid my way through college and then some (unfortunately the business no longer exists). I have about 100k saved up. I should have a pretty good credit score, although I haven't checked to see what it is for sure. I am planning on starting business school in the fall, but part-time.

Recently I have been interested in purchasing an established business, and have taken a strong interest in gas stations. After much research and analysis, I have found a gas station that I believe is a great value. Here are the basic annual numbers:

Sale Price - $1,100,000
Gross Income - $6,700,000
Cash Flow - $430,000
-20 years remaining on the lease at a competitive rate.
-High volume of gas sold on a very business intersection.
-Good sized Convenience Store, but has room for improvements.
-Smog Test station (alone produces about $10k/month NET).

Some other facts about me: My father has owned and managed a liquor store for over 20 years and will help me make the convenience store improvements. He has great supplier connections and lots of experience. He will also be involved in running the business. The gas station is less than 2 miles away from where I live, so it is very convenient for me to manage. Employees currently run most of the day-to-day business activities.

Receiving capital from family is a no go. The seller is not willing to carry a note. I have spoken to my local banks and they have said that to qualify for an SBA loan, I would need to have about 30-35% down (maybe even more). I did some research on Angel Investors, but did not find what I was looking for. What other options do I have for financing? Where can I find individuals looking to make such investments?

Thanks in advance!

Last edited by bsacc; 03-12-2008 at 03:55 AM.
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Old 03-12-2008, 03:33 AM   #2 (permalink)
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what about vendor finance? or an MBO?
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Old 03-12-2008, 04:02 AM   #3 (permalink)
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Quote:
Originally Posted by akula View Post
what about vendor finance? or an MBO?
I will look into vendor financing. That actually sounds like an interesting idea.

Can you please elaborate on the MBO?
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Old 03-12-2008, 08:13 PM   #4 (permalink)
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mbo = get the employees of the business to help you buy the business...and later down the track, you can buy back shares in the business from the employees to own the whole thing
...it's slightly more complicated/flexible than that, but look it up
Management buyout - Wikipedia, the free encyclopedia
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Old 03-14-2008, 02:16 PM   #5 (permalink)
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Only problem with the MBO is that the employees of the gas station probably don't have that kind of capital. However, I contacted the gas vendor about financing options and am waiting to hear back. I hope they have something for me!

btw... thanks!
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Old 03-16-2008, 12:51 AM   #6 (permalink)
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no sweat
keep us informed on what's happening
there's also other financing alternatives you can pursue
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Old 03-17-2008, 01:15 PM   #7 (permalink)
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The financing alternatives link has some good information. Please keep us posted!
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Old 03-17-2008, 03:02 PM   #8 (permalink)
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I am currently organizing a seminar in Denver Colorado April 5-6 that specifically offers NINE ways of infusing capital into a business. This is all pretty new to me, but I can tell these people know what they are talking about and can help educate you on all of your options. Good luck!
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Old 03-24-2008, 07:39 AM   #9 (permalink)
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Where are you located?

- Neil
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Old 03-24-2008, 06:04 PM   #10 (permalink)
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Like many entrepreneurs, I don't know much about the details of financing and other things, I just know people who know those things. My advice would be this: If you are going to run your own business, don't waste your time or money on business school. Business schools tend to teach middle level management "business", not business ownership. Most successful entrepreneurs either have no formal education, or would quickly tell you their formal education had little to do with their success. Think Bill Gates, Michael Dell, Andrew Carneige, Donald Trump, Robert Kiyosaki, etc. I'd keep your time to yourself and your money in the bank. If you want to invest in your understanding of business, I'd invest in literary material by the above authors and others. There is no one better to learn from.

Last edited by Brad Burnette; 03-24-2008 at 06:27 PM. Reason: Adding Signature
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Old 03-24-2008, 06:28 PM   #11 (permalink)
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