SNK Farms and AAMA Auto Service - White Plains and Cold Spring, NY
Ali Kirmani had already established himself as a successful entrepreneur when he applied to NYBDC for loans to buy his eighth and ninth gas stations.
Gulf Oil had recently approved Kirmani's SNK Petroleum Wholesalers Inc. as a licensed distributor of its gasoline, and the strategy of buying gas at wholesale prices allowed Kirmani to sell it cheaper at all of his locations. His business model, which also included plans to open more gas stations and repair shops, so impressed NYBDC and Tompkins Mahopac Bank that the lenders partnered in two separate loans.
The first, a 504 SBA loan totaling $1.3 million, helped Kirmani buy the property for his SNK Farms gas station and convenience store in Cold Spring. The second, a $1.35 million NYBDC loan, was used to buy property and equipment to convert a former Cumberland Farms in downtown White Plains to AAMA Auto Service, a gas station/repair shop.
The loan for White Plains initially fit into the 504 program. But the property required ongoing monitoring from a previous spill and had not been cleared by the state Department of Environmental Conservation. The seller, Gulf, signed an agreement accepting full financial responsibility for the cleanup costs, but the SBA would not approve the indemnification. That left the parties to find alternative financing. Kirmani came up with some additional funds, and NYBDC provided first-mortgage financing for him to acquire the property. Mahopac agreed to a 50 percent participation in the loan.
Despite his solid business acumen and thriving retail outlets, Kirmani, who owns the business with his wife, Fatima Kirmani, said other lending institutions repeatedly turned down their loan requests. “We were talking to banks and hitting lots of walls,” he said.
Kirmani's strategy for eliminating the "middle man," along with his acute understanding of the industry, were among the factors that influenced NYBDC's decision to approve his business for the $2.65 million in loans.
"Ali was very impressive as a multi-business owner/operator, and he had an unbelievable knowledge of the futures market and how small fluctuations in price could greatly affect his gas station operations," said Greg Powell, NYBDC vice president.
Bill Dunkel, regional vice president at Tompkins Mahopac Bank, said Kirmani showed the bank how he increased sales by selling the gas at lower prices, and how, in turn, that additional traffic increased sales at the convenience stores and repair shops.
"The ability to get his product cheaper allowed him to sell the product cheaper at his locations, which was the basis for his business model," Dunkel said.
Since opening the Cold Spring and White Plains gas stations, Kirmani has opened five more locations. That brings his total number of outlets to 15 gas stations and seven repair shops in Westchester, Bronx, Putnam, Dutchess and Orange counties.
He also operates a trucking company that delivers gasoline to all of his stations. This allows him to better control costs internally. The Cold Spring and White Plains locations added 10 new employees, and Kirmani's company now employs more than 80 people.