What is the repayment tenure for a petrol pump business loan?

Most financial institutions usually structure petrol pump business loans with medium to long repayment tenures of 5-10 years or more.

The exact loan tenure offered can vary based on multiple factors related to the borrower's profile and project viability. Some of the parameters that decide the tenure are as follows:

• Loan amount applied for
• Applicant’s eligibility and financial strength
• Projected revenue and cash flows
• Type of lending institution
• Location of the proposed petrol pump
• Ownership status of project land
• Quality of collateral security provided

Since setting up a petrol pump requires a substantial capital outlay, longer repayment periods help reduce the pressure of cash flows and periodic instalments for entrepreneurs.

Banks and Non-Banking Financial Companies (NBFCs) are open to providing a customised repayment schedule based on the borrower's specific requirements, capital position and viability of the petrol pump business.

Applicants should assess their finances and cash flows before choosing an appropriate loan tenure to ensure smooth repayment and sustainable growth of their retail fuel outlet.