Frequently Asked Questions (FAQ) 

1. Is PetroMAC a direct lender?

NO, PetroMAC is a mortgage broker and has originated hundreds of millions of dollars of loans doing gas station, convenience store and car wash loans.

2. Do you pull our credit?

NO, PetroMAC normally will not pull credit. We have the ultimate lender do this as not to pull your score down.  You may use something like Free Credit Report which will give a score and not pull your individual score down.

3. How many sources do you submit to?

In years gone by we would have only submitted to 1-2 sources, but because of the credit crunch, we submit to multiple sources now.

4. Do you charge up front or application fees?

NO, we do not charge up front or application fees for car wash loans. 

5. Where do you find your sources?

We do "recent sales" searches, UCC lien filings, Freedom Of Information requests to find the most recent transactions done and the ultimate lender that did them.

6. Do you charge in addition to origination that the lender will charge?

If the loan is being done SBA, normally not. If a loan is done as a 504, no more than a half point, if any, will be charged.  On conventional loans, where there normally is no referral fee, we normally will charge no more than a point.

7. How do you determine if you do a loan SBA, conventional or some other basis?

That decision is usually based on the cash flow of the business since it is easier toq alify for SBA financing with less cash flow than with conventional due to longer amortization periods and higher advances.

8. What are the rates being charged?

If the loan is being doing SBA, the rates will be either based on Prime or LIBOR and conventional financing could be based on Prime, LIBOR, Treasury indexes or some internal rate that the particular bank might have.  Since we do not earn a "premium" on these loans and generate extra commission by charging a higher rate than market, our motivation is to make sure you have the best rate.

9. How long does it take to get a loan approved?

In years gone by, it usually took about fourteen business days after receipt of all request documentation.  This is NOT the case now. We like to tell borrower now that it taking about a month for an approval, and that is AFTER we have received all necessary documentation for a submission.

10. What is the most difficult type of financing to have done?

Business only transactions are usually the most difficult type of financing to be done as there usually is little to no collateral available and the shorter amortization periods (usually 7-10 years) make it more difficult to have adequate cash flow for.  We do work on these type loans.

11. I am a New American and I still do not have permanent resident alient status. Can I obtain financing?

You most likely will not be eligible for SBA or conventional bank financing. In some cases you may be eligible with an investor Visa.  Please submit details and we can give an opinion.

12. Do you do construction financing?

Yes, we do ground up construction, raze and rebuilds and expansion financing.

13. What if I do not have enough for a down payment? Can the seller hold a second?

Yes, however, the borrower will still need to come up with a good portion of the down payment.  If part of the down payment is coming via a home equity loan or some other source that has to be repaid, this will be considered as Combined Loan To Value (CLTV).  This means the cash flow of the business will need to be able to service two loans.

14. Who do you use for appraisals?

We do not and can not order appraisals, neither can the seller nor the borrower or any mortgage broker.  The borrower or seller can order an appraisal to see if an appropriate amount is being charged for a sales price but the appraisal may not be used for the loan.  We usually try and advocate that companies that specialize in appraising car wash properties be used as they understand the nuances of the industry.

15. What are the main reasons loans are declined?

The number one reason is lack of verifiable cash flow.  The car wash business is a cash business and frequently tax returns are not indicative of what the business is actually doing.  Other major contributing factors are lack of direct industry experience (for purchases / construction), insufficient or non-borrowed equity (for purchases / construction) providing requested documentation in a prompt manner.  Sometimes car wash loans are declined due to environmental issues or local conditions (construction, new competition, etc.)

16. Do you have to have an environmental done on the site?

Yes. A Phase I will always be ordered at a minimum on any SBA or conventional transaction by most lenders.

17. How long does it take to have a Phase 1 environmental done and how much do they cost?

Usually a week.  Normally a visual inspection of the property will be done and records checked online for any REC's (Recognized Environmental Conditions) and to see if there are any open files with either ongoing remediation or monitoring activities that do not have a closed file with the State and an NFA (No Further Action) letter issued. Phase I environmentals usually cost approximatley $2,000.

18. How long does it take to have an appraisal done and how much do they cost?

Appraisals have been averaging 3-4 weeks to be done. Borrowers can usually pay extra to have the appraisal expedited. Appraisals normally cost between $3,000 - $3,500.

19. Does PetroMAC operate from a centralized location?

NO.  All work from their home.  Frequently we will use mail centers (UPS Center, etc.) to receive documentation if the borrower can not provide via email or fax.

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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