South African Entrepreneur Looking for a Loan to Buy a Petrol Station

Opportunity Snapshot

Filling a car with fuel

Investment Opportunity

I am looking to purchase an existing petrol filling station and I need funding for the acquisition. The net profit of the station is ZAR 100.000.00 plus.

With world energy consumption set to rise by around 40 percent between 2012 and 2030, the energy system is changing fundamentally, making companies’ decisions about fuel more complex and important than ever before.

While clean and renewable transportation technologies are gaining ground, petroleum will remain the backbone of our useful fuel resources for decades to come. In light of this, companies must make smarter decisions about their current choices among fuels, which often will be choices within fossil fuels.

In South Africa there is high demand of fuel since it is a developing country with growing economy. Therefore, investing in a petrol station is a sound decision that will generate stable revenues over a period of more than 20 years.

By acquiring an existing business we will gain know-how when and later on empower young people to be entrepreneurs and develop small and medium enterprises.

Since purchasing existing one, these company that specialize on selling the petrol with good profits. The maximum funding needed ZAR 8,000,000.00 ($790,000.00). The investor will have share of 43% of net profit monthly or annually (depends on investor's decision). The investment is valid for 14 years.

The competition will depend on the location where the station is going to be situated. The way to outperform my competitors is to know their weakness and capitalize upon my strengths.

The country gives entrepreneurs opportunity to make money in Petroleum as the sector enjoys high demand. The best strategy is to buy a petrol station that has recognizable brand name as consumers pay attention on the brand name. Another key success factor is the location of the station. I have Business Qualifications and I’m ready to run the business. I am looking to improve the business by 6% margin per year.

The expected turnover per month is R3,400000.00 (two comma four million rand) and the net profit is R170 000.00 plus.

The maximum funding needed is up to R8,000,000.00 ($790,000.00) and the amount will be used to acquire or buyout the management. R1,000,000.00 ($100,000.00) will be kept as a reserve fund in case the business faces any contingency situations once taken over.

The requested loan amount is $790,000.00. It can be paid monthly or annually by 43% of the net profit and 3% of the interest rate. The amount will be paid back in 14 years.

Competitive Advantage

The competition will depend on the location where the station is going to be situated. The way to outcompete my competitors is to know their weakness and capitalize upon my strengths.

Rationale for the deal

The country gives entrepreneurs opportunity to make money in Petroleum as the sector enjoys high demand. The best strategy is to buy a petrol station that has recognizable brand name as consumers pay attention on the brand name. Another key success factor is the location of the station. I have Business Qualifications and I’m ready to run the business. I am looking to improve the business by 6% margin per year.

Reasons for purchasing a franchise:
• Proven business:
• Lower risk
• Established customer base
• Marketing umbrella
• Initial and ongoing support by the franchisor
• Exclusive rights for the territory
• Ease of funding
• Greater bargaining power towards suppliers

Use of financing

The maximum funding needed is up to R8,000,000.00 ($790,000.00) and the amount will be used to acquire or buyout the management. R1,000,000.00 ($100,000.00) will be kept as a reserve fund in case the business faces any contingency situations once taken over.

Opportunity for the investor

The requested amount is $790,000.00. It can be paid back monthly or annually in the form of dividends from the net profit and an interest rate of 3%. The amount will be paid back in 14 years.

The investor won't need to be involved in day-to-day management and can act as a silent investor.

Image Source: Flickr CC, Author: Marko Vallius

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