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Navigating Gym Financing: What You Need to Know to Get Started


Opening a gym can be quite expensive, with costs ranging from $10,000 to over $1,000,000, depending on the size and location of the gym. Once your gym is open, you’ll face monthly and annual operating costs for maintenance, upgrades, staff salaries – the list goes on and on.

Fortunately, for the prospective gym owner, many gym financing options help you cover these initial and ongoing costs while keeping your business afloat.

Types of Gym Financing

From a gym business loan to venture funding, there are several commercial gym financing options you can choose from based on your goals. 

Opening a New Gym

Just like any start-up, opening a new gym requires significant upfront costs. You’ll have to consider one-time costs like certifications, licenses, and location, as well as recurring fees for mortgage, insurance, and utilities.

From fitness center loans to a gym business loan, below are financing options to help you start a gym:

Small Business Administration (SBA) Loans

The government offers small businesses, including gyms, SBA loans to help with start-up and expansion costs. This type of gym business loan has a low-interest rate and long repayment terms, making it an attractive option for new gym owners.

Here are the two most popular SBA loans to help finance your gym business:

a) SBA 7(a) Loans: Small business loans issued by a private lender and partially guaranteed by the U.S. Small Business Administration. SBA 7(a) loans provide interest rates ranging from 11.5% to 15%, loan amounts of up to $5 million, and repayment periods of up to 10 years.

b) SBA 504 Loans: This small business loan for a gym is designed to purchase fixed assets like land, buildings, and equipment. These loans are available to businesses with a tangible net worth of less than $15 million and average annual profits of $5 million or less.

Conventional Bank Loans

This type of loan for gym business offers competitive interest rates and flexible repayment plans. However, banks may require a high credit score and collateral to secure the loan.

Here are the general considerations on how to get a loan for a gym: 

  • Good credit score (usually 680 or higher)
  • Detailed business plan
  • Collateral to secure the loan
  • Personal and business tax returns for at least two years
  • Financial statements and projection

Unsecured Business Loans

Unsecured business loans are a type of loan for gym businesses that don’t require collateral. This makes them an attractive option for new gym owners who may not have the assets to secure a business loan for a gym.

These loans usually have higher interest rates and shorter repayment periods than traditional bank loans. However, they offer quick funding and flexibility in using the funds.

Some common types of unsecured business loans for a gym include:

  • Business Line of Credit: A pool of funds that you can draw from as needed, making it an excellent option for managing cash flow.
  • Merchant Cash Advance: A lump sum payment in exchange for a portion of future credit card sales.
  • Invoice Financing: Borrowing money against outstanding invoices to improve cash flow.

If you’re unsure how to get a loan for a gym, consider seeking advice from a financial advisor or consulting with other gym owners who have successfully secured loans.

Venture Capital Funding

Venture capitalists provide financing to businesses in exchange for equity or ownership in the company. This type of funding is more common for high-growth start-ups rather than traditional brick-and-mortar businesses like gyms.

However, if your gym has a unique concept with the potential for rapid growth and scalability, you may be able to secure venture capital funding. Be sure to analyze the terms of the engagement, as some investors may require a say in how your business is run.

Expanding an Existing Gym

Your gym is up and running, and business is booming. However, you’ve outgrown your current space or want to add new amenities to attract more members.

Business expansion loans are a form of small business financing that assists companies in purchasing new equipment, opening new locations, hiring more staff, or launching new marketing campaigns.

A few business expansion loans you can tap into include:

a) Traditional Bank Loans: As mentioned earlier, banks offer competitive interest rates and repayment plans for established businesses looking to expand.

  • Maximum loan limit: $500,000
  • Loan duration: Between one and ten years
  • Interest rate: Approximately 7% to 30%
  • Funding timeframe: 48 hours to 14 business days

b) SBA Loans: Features low interest and extended repayment terms.

  • Maximum loan limit: $25 million
  • Loan duration: Five to 25 years
  • Interest rate: Maximum of Prime + 4.75%
  • Funding timeframe: Three weeks or more

c) Business Line of Credit: Revolving credit facility that you can use for business purposes, including expansion.

  • Maximum loan limit: $1 million
  • Loan duration: 6 months to 5 years
  • Interest rate: Typically between 7% and 25%
  • Funding timeframe: As soon as the same day, but usually within a week.

d) Merchant Cash Advance: A lender extends a loan and automatically deducts a percentage of your daily credit card receipts (plus fees) until the loan is fully paid.

  • Maximum Loan Limit: $250,000
  • Loan Duration: Deducted from sales receipts
  • Factor Rate: Typically between 1.14 and 1.18
  • Funding Timeframe: Usually within a week

Funding Your Gym Equipment

Any gym needs proper equipment to operate successfully. You can finance gym equipment with these funding options:

Equipment Financing

Equipment financing is a loan for a gym business designed to help businesses finance gym equipment or machinery. Some financing companies fund 100% of the purchase minus a down payment.

The terms and conditions on how to finance gym equipment with this type of loan vary depending on the lender, but here are the general requirements:

  • A good credit score with a score of at least 600 for personal credit score and 75 for business credit score
  • Financial statements
  • Comprehensive business plan
  • Potential collateral

Leasing Equipment

Leasing equipment is a great option to finance your gym while saving on upfront costs. With a lease, you can use the equipment for a specific period in exchange for regular payments.

Pros of Leasing Equipment

  • No down payment required
  • Lower monthly payments compared to purchasing equipment
  • Tax benefits as lease payments are tax-deductible

Cons of Leasing Equipment

  • Higher total cost of ownership due to interest fees and other charges
  • You don’t own the equipment outright and may have limited control over its maintenance and upgrades
  • Lengthy lease agreements and restrictions on equipment usage

Hire Purchase Agreements

Like equipment leasing, hire purchase agreements allow you to obtain equipment without paying the full cost upfront. However, if you finance gym equipment with a hire purchase agreement, you can eventually own the equipment by making regular payments until the agreed-upon amount is paid in full.

Key considerations for hire purchase agreements include:

  • Higher total cost of ownership due to interest fees and other charges
  • You own the equipment at the end of the agreement, giving you more control over its use and maintenance.
  • Defaulting on payments can result in repossession of the equipment.

Set Yourself Up for Success With Gym Rescue

Acquiring necessary funding gives your business the means to grow and succeed. However, it’s essential to carefully analyze your options and choose the best financing option for your gym’s unique needs.

Not sure how to get a loan for a gym or just generally want to learn more about how to finance your gym? For expert advice on financial planning and funding for your gym or fitness center, turn to Gym Rescue Marketing®. Since 2001, we’ve helped numerous gym owners secure the funding to expand and improve their businesses.

Please complete our online form to get started, or contact us for more information.