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Automotive and Gas Station Hard Money Loans


Automotive and gas station owners have the option to use hard money loans secured by their real estate to quickly access cash. Hard money loans differ from traditional loans in that they’re short-term bridge loans that help borrowers acquire, refinance or reposition debt before taking out long-term financing or selling the property. Borrowers who are in transition and can benefit from a quick-closing, short-term loan may see the benefits of this option.

While automotive and gas station hard money loans do offer several advantages, they also come with their own set of drawbacks. They often have higher interest rates and shorter repayment terms than bank loans. However, flexible and accessible hard money loans can be a good option for business owners who need quick, short-term financing, with less financial scrutiny than an institutional commercial mortgage.

In this blog post, we’ll discuss the key features of automotive and gas station hard money loans: terms and pricing, pros and cons, requirements for obtaining financing, and our experience at First Capital Trust Deeds (FCTD) brokering loans for gas station and automotive real estate owners.

Why Do Auto Shops and Gas Stations Use Hard Money Loans?

One reason automotive and gas station hard money loans attract business owners is that they’re typically easier to obtain than traditional bank loans. A hard money lender, also known as a private money lender, will usually forgo most of the detailed financial and real estate analysis that banks require when underwriting a loan.

But the lender won’t completely disregard the finances. They’ll want to see 6-12 months of bank statements to determine the typical cash flow and expenses. From there, the lender will get a valuation on the property. The valuation may be a full commercial appraisal, a broker’s price opinion (BPO) from a real estate agent specializing in gas stations or automotive properties, their own internal valuation — or a combination of the three. After establishing the value, the hard money lender determines the loan amount and Loan-To-Value (LTV) they’re willing to fund.

Loan Features

Borrowers should understand the features of automotive and gas station hard money loans before seeking out this type of financing. Loan amounts, interest rates, duration and other loan terms differ from commercial mortgages.

Hard money loans are generally short-term, ranging from 12-36 months with a balloon payment due at maturity. As asset-backed loans, the interest rates and closing costs are higher than bank loans, with the loan amount based on the property value rather than the net operating income.

Terms, Pricing, Closing Costs, and Interest Rates

Hard money loan pricing is higher than institutional financing, including bank loans, SBA, or commercial mortgage-backed security (CMBS) programs.

An important fact to remember is that each hard money loan scenario has its own unique circumstances that dictate pricing. Some situations are difficult, such as a gas station owner who buys a new store with no money out-of-pocket using a cross-collateral blanket loan, tapping the equity from their current properties that happen to be out-of-state. This transaction’s high leverage and multiple moving parts bump up the price.

On the contrary, a real estate investor acquiring a multi-tenant automotive building through a 1031 exchange with an 80% down payment will have a lower pricing structure due to the minimal risk.

Below are general costs a borrower should expect when comparing terms for an automotive or gas station hard money loan: 

  • Loan Amount – $250,000 to $5 million
  • Loan to Cost (LTC) (for construction or renovation) – 75% max
  • Loan-to-Value – 65% max
  • Interest Rate – 8.99% to 13.00%
  • Prepayment Penalty/Interest Guaranty – Dependent on lender guidelines
  • Loan Term – 12-36 months
  • Lien Position – 1st or 2nd
  • Points – 2 to 5 points
  • Document Fee – $1,100 to $3,500
  • Appraisal  – $2,000 to $4,000* commercial appraisal Broker Price Opinion (BPO)
  • Environmental Report – $2,000-$5,000*
    *Valuation costs determined by third party providers.

Pros and Cons of Automotive and Gas Station Hard Money Loans

There are several benefits and drawbacks of hard money loans for automotive and gas station properties.


  • Quick closing
    Hard money loans can close in as little as one week. FCTD has closed some hard money loans in as few as 24 hours, but we prefer a little more time to review the details. If a borrower comes to FCTD for a last-minute hard money loan, we can close quickly with leverage of 65% LTV or lower, and a completed appraisal and Phase 1 environmental report.
  • Cross-Collateral
    Using two or more properties can increase the combined loan-to-value (CLTV). This helps when an owner has multiple properties and needs additional cash out — or they’re using the equity from a few properties to acquire a new property with little to no down payment.
  • Flexible Terms
    Private money lenders can work with a borrower to structure the loan to fit the circumstances. For example, a borrower might only need a bridge loan for 3-4 months until they file their tax returns and can then qualify for a bank loan. The lender can structure this loan with a 12-month term and a 3-month interest guaranty.


  • Pricing
    Hard money loans are expensive. They’re not ideal, but they’re good for less-than-ideal situations before long-term financing or selling the property is achievable.
  • 12-36 Month Duration
    Short-term loans might not give an owner enough time to turn their cash flow or financial situation around. Some borrowers underestimate their timeline or don’t factor in unexpected problems. If someone has a 12-month loan but really needs 18 months, they’ll incur extra costs for either a loan extension or refinance.
  • Carrying Costs/Negative Cash Flow
    If a multi-tenant automotive property has several vacancies, the debt service costs of the short-term hard money bridge loan can be financially draining to the owner. A borrower who lacks sufficient liquidity will struggle to service the debt on a bridge loan with a note rate of 11.00% or 12.00%.

Obtaining a Hard Money Loan for a Gas Station or Automotive Property

To get a hard money bridge loan, it’s best to have all of your financial statements and property reports ready to send to a lender for underwriting.

I recommend you have these items ready: 

  • Personal financial statement
  • Tax returns – personal and business (two most recent years)
  • 12 months of business bank statements
  • Investment account statements
  • Franchise agreement (if applicable)
  • YTD financial statements – Profit & Loss + balance sheet (unaudited)
  • Appraisal or BPO from a real estate agent specializing in this property type
  • Environmental report
  • Entity documents – Articles, Operating Agreement/Bylaws, and EIN
  • Exit strategy – letter from a bank, purchase & sale agreement (if you’re selling the property)

Why Choose FCTD for Financing Your Next Gas Station or Automotive Loan?

FCTD has facilitated several hard money loans secured by gas stations and auto repair properties. We don’t specialize in this asset class — but have experience working with owner operators and real estate investors who own several of these properties. We’re experts in hard money and private money lending and have closed over $2.5 billion in private loans for investors. Some of our trust deed investors (lenders) own many gas stations and can quickly analyze the property to determine the property value, loan amount, and exit strategy. They’re very comfortable lending against gas stations and automotive buildings.


Automotive and gas station hard money loans can be a useful tool for business owners who need quick access to cash. Although they come with higher interest rates and shorter repayment terms than traditional loans, they offer the flexibility and accessibility that can be invaluable for borrowers in transition. Understanding the key features, terms and pricing of these loans is essential for making an informed decision when seeking financing for an automotive or gas station property. It’s important to note that while hard money loans have fewer barriers than traditional bank loans, borrowers must still meet certain qualifications and have a solid repayment plan in place.

At FCTD, we have extensive experience serving the gas station and automotive property sector, and can help provide this valuable financing option to borrowers who would benefit from the advantages of a hard money loan.

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