What are the eligibility criteria for a petrol pump business loan?

The key eligibility criteria for securing a business loan for starting a petrol pump in India are:

• Location Permit: You need to first apply for and obtain a retail outlet licence from the state government or oil marketing company. This permit approves the proposed land location.
• Credit Score: A minimum credit score of 700 or above is preferred by banks and Non-banking Financial Companies (NBFCs) for availing a petrol pump loan. A higher score indicates better repayment capacity.
• Financial Documents: The last three 3 years financial statements, bank statements, Income Tax Returns (ITRs), and CA’s audit reports are required to demonstrate healthy finances.
• Collateral Security: Hard collateral like property, fixed deposits or insurance policies may be required by most lending institutions.
• Industry Experience: Prior experience of 1-2 years in fuel retail is an advantage as it highlights operational knowledge.
• Refining Agreements: A letter of intent from oil companies like HPCL or BPCL agreeing to provide fuel may be required for loan approval.