How Gas Station Loans Can Help Small Businesses Enter the Booming EV Charging Market

As more and more Americans steer towards electric vehicles as choice of transportation, there is a growing need for more places to charge them. Recognizing this rising trend, a lot of gas station owners across the nation are making expensive overhauls to make their businesses future-proof by adding EV charging stations to their existing services. But like any important upgrade, this requires a lump sum amount, which most small gas stations struggle with. That’s where, gas station loans and working capital come to the rescue. By tapping into these resources, even small gas station owners can expand their services, increase their customer base and retain an edge over their competition in this dynamic sector.

Before we delve more into this, it is important to understand the EV charging trend and its future.

Why EV Charging Market is Booming

With electric vehicles becoming extremely popular across the world, driven by factors like environmental issues, government incentives and innovation in batter technology, the demand for gasoline is expected to decrease, posing a serious challenge to traditional gas stations. But this shift towards EVs presents a unique opportunity to diversify their services for those willing to adapt. EV charging stations can help gas stations to provide diverse services to a growing segment of vehicle owners, thus ensuring that their business stays relevant in this fast-changing landscape.

Why do You Need Funding for Installing EV Charging Stations

Adding an EV charging station is not child’s play. There are multiple aspects – such as location, cost, power requirements and conversion time – to consider before deciding to convert all or a part of the existing infrastructure to allow for EV charging.

Another facet of EV charging station to keep in mind is the charging model. Some locations like office complexes, hotels, hospitals and even car dealerships offer slow charging options which are usually free of charge, since people stay there for hours at a time. However, gas stations are investing in powerful Level 3 chargers, which generally charge a car in 20-30 minutes. The equipment cost for fast charging can range from $50,000 for one charger to $500,000 for multiple chargers and dispensers. The infrastructure itself generally costs about twice as much. That’s why you need financial assistance to add this service to your gas station.

Benefits of Adding EV Charging Stations to Your Gas Station

Though it is estimated that the return on investment could be seven to ten years on average, the benefits of adding EV charging stations cannot be ignored. Let’s check out some of the advantages of EV stations that can prove useful to gas station owners:

1. Getting a New Customer Base: As more and more people are adopting electric vehicles, the need to recharge the vehicles is also on the rise. Adding an EV charging station can solve this challenge and while the customers wait for their cars to get charged up, they might pay a visit to the convenience store at the station or make other purchases, resulting in an increase of overall revenue.

2. Boosting Brand Image: A lot of businesses are taking steps towards making their businesses more environmentally friendly, which helps to boost their brand image. Installing EV charging stations can also do the same for gas station owners. It can give the business owners a first-mover advantage in the sector and set them apart from their competitors.

3. Increased Foot Traffic: As electric vehicles increase, the need for charging stations during commute is also likely to increase. This will, in turn, increase the possibility for extra sales for the business.

4. Long-Term Profitability: Setting up an EV charging station may be an expensive affair in the beginning, but the long-term profitability can’t be denied. By investing in the EV charging market now rather than later, small businesses can get first-mover advantage, which will put them in a profitable position in the market in the long run.

Financing the Expansion with Gas Station Loans

Installing an EV charging station requires hefty capital to make them happen. This is where gas station loans have become a crucial tool to securing funding for business owners looking to upgrade. These loans are especially designed to meet the unique challenges of gas station operations. They can offer the working capital needed to cover the costs of expansion, including the purchase and installation of EV charging equipment.

Benefits of Gas Station Loans

• Easy Access to Working Capital: Gas station loans can offer access to the capital needed for major improvements without straining the business’s cash reserves.
• Flexible Repayment Terms: Most lenders nowadays offer flexible repayment terms that allow businesses to manage their cash flow easily.
• Boosting Property Value: It has been observed that setting up EV charging stations tends to boost the value of the real estate it is built upon, making it a good investment.

Additional Financing Options That Can Support EV Expansion

Traditional gas station loans might not be suitable for every business. But there are other funding options that can come to aid during these situations:

1. Business Lines of Credit: This type of financing offers regular access to capital to borrowers. This is particularly useful to gas station owners who want to slowly set up EV charging stations. A business line of credit provides more financial flexibility, allowing borrowers to pay interest only on the amount used.

2. Revenue-Based Financing: A consistent revenue stream can help gas station owners secure revenue based financing, which can be a great funding aid for their expansion. Since the repayment is linked to a business’s monthly income, entrepreneurs can find it easy to repay even in those periods when the business is slow.

Conclusion

Entering in the EV charging market now can be a game-changer for your gas station business. It can position your business for a long-term success in a rapidly growing market. By opting for working capital, gas station loans or other small business funding options, small business owners can get the money to build the infrastructure for EV charging stations without disrupting their current daily operations. It is not a question of if anymore when it comes to electric vehicles. The question that business owners need to ask whether they want to stay relevant in a fast-changing world where gasoline-based automobiles are slowly fading away and be in a good position to meet the demands of tomorrow’s customers.