Credit Lines and Borrowing

On July 29, 2008 Independent Connecticut Petroleum Association issued a memorandum to all its heating oil retailer members outlining the challenges and opportunities faced in assembling the credit lines and borrowing needs for the coming winter. The average 2.5 million gallon company that had to capitalize $1,150,000 for wholesale oil in 98/99 is looking at $9,125,000 in 08/09. That same company sells 20 percent of its annual volume in January [500,000 gals], and will need $2 million in credit to purchase oil on 10 or 30 day terms and wait 30-45-60 days to be paid by consumers or longer.

The ICPA memo (available at the association’s Web site), outlines the new SBA 7 [a] loan guarantees that are available to heating oil retailers, effective August 21, 2008 when the SBA rule change takes effect. The memo also outlines the Connecticut Development Authority loan guarantee available under its URBANK program. The SBA and CDA loan guarantees can work together at the same time. This memo is a comprehensive overview of the tools retailers have available in order to plan for the capitalization of their companies for the coming winter, and now is not too early to start.

For more information contact Gene at  or call ICPA toll free at 1-866-521-ICPA

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