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Interested in expanding business? Here’s how to get a loan for a gym

Loan for a gym

 

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Starting a new gym can be an exhilarating yet challenging venture, especially when it comes to securing the necessary capital. If you’re wondering how to get a loan for a gym, you’re not alone.

The journey begins with a clear understanding of your gym’s unique selling point—what makes your fitness hub stand out? This could be anything from offering cutting-edge fitness technology, unique classes not available elsewhere, or perhaps a focus on community and wellness that goes beyond physical training.

Next, you’ll need to navigate the financial landscape to find the best funding options suitable for your gym.

“You’ll need to understand the different types of financing available, from traditional bank loans to more niche options like equipment financing or merchant cash advances. Small business lenders, like Credibly, can help you narrow down your options based on your goals,” said Credibly Founder Ryan Rosett.

In this blog post, we’ll go over how much it costs to expand a gym, the best-fit business loans and financing for a gym, tips for keeping your gym financially sustainable, and how an alternative lender can help you get going.

 

How much does it cost to expand a gym?

Whether you’re looking to open a new gym, expand your existing one, or pivot into new services, you need to take a look at the numbers. Some costs to consider might be:

  • Licensing and management: You’ll need to file for a business license with your state, which typically costs between $50 to $200. Keep an eye out for renewal fees.
    You should also expect to spend a few hundred to a few thousand dollars on operations essentials like hiring an office manager, purchasing computers, and subscribing to gym management software.
  • Maintenance: Ongoing maintenance, including cleaning and equipment repairs, might range from a few hundred to several thousand dollars per month, depending on the size of your gym.
  • Equipment: Initial costs for equipment range up to $50,000 for a large commercial gym. Equipment might include treadmills, free weights, resistance bands, and more.
  • Legal and insurance: Legal fees can reach up to $15,000, while property casualty insurance might cost around $6,000.
  • Marketing outreach: Marketing efforts, including SEO and social media marketing, can vary widely, costing from a few hundred to over $4,000 per month.

You could qualify for up to $600,000 in right-fit financing.

Speak with a financing expert today.

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Best-fit financing and loans for gyms

When you’re considering financing options for opening or expanding your gym, you have several choices to help you succeed.

1. Working capital loan

Get fast access to capital with a working capital loan, which can be a lifeline for handling day-to-day expenses. These loans are ideal for quick infusions of cash with approval possible in just hours, and funding available in as little as 24 hours from approval.

Rates are manageable, and the repayment terms can be daily or weekly. Setting up automatic payments can help you focus more on growing your gym and less on financial hurdles.

2. Long-term loan

For substantial, long-term investments in your gym, consider a long-term business loan for your gym. These loans are perfect for larger projects like expansions or major upgrades, offering larger amounts of capital with lower interest rates and longer repayment periods. At the same time, long-term loans may have higher minimum eligibility requirements to qualify.

3. Equipment financing

This option allows you to finance essential equipment needed for your gym, such as treadmills and member access control systems. The equipment you finance will act as collateral, meaning if you fail to meet the payment terms, the lender can take back the equipment. This option often has higher interest rates but is more accessible if your credit isn’t perfect.

4. Merchant Cash Advance (MCA)

This is an excellent option if your gym is already up and running and you have consistent credit card transactions. An MCA provides funds based on your future debit and credit card revenues, with remittances being a fixed percentage of your daily card sales.

This allows your payments to fluctuate with your business volume, offering flexibility, though it typically comes at a higher cost due to flat rates.

5. Small Business Administration (SBA) loans

SBA loans, such as the 504 and 7(a) programs, are designed to support small businesses, including gyms like yours.

These loans are secured by the SBA, which reduces the risk for lenders and increases your chance of approval. The 7(a) program, for example, offers interest rates that adjust with the Prime Lending Index but typically includes a cap to keep rates manageable.

6. Line of credit

A line of credit gives you access to a pre-approved amount of cash that you can tap into as needed. You can choose between an unsecured line or an asset-based line, where your assets, like equipment or accounts receivable, serve as collateral. This type of financing is particularly useful for managing cash flow and covering operational expenses quickly and efficiently.

 

Learn more about your small business financing options: 

How to keep your gym financially sustainable

Creating a sustainable financial model for your gym involves comprehensive planning, effective cost management, diversifying income streams, and smart investments.

Diversify revenue streams

To cut dependency on membership fees, diversify your revenue with some of the following ideas:

  • Personal training: Offer personalized training sessions. These can be tailored to different budgets and fitness goals.
  • Group fitness classes: Popular classes like yoga or spin can attract new members and generate extra income through class fees.
  • Space rental: Rent out spare space in your facility to other fitness professionals.
  • Events and challenges: Host special events or fitness challenges to engage the community and attract potential new members.

 

Loan for a gym

Source: Spark Membership

Reinvest in your gym

Regularly reinvest in your business to improve the customer experience. This includes maintaining state-of-the-art equipment, ensuring facilities are clean and welcoming, and providing excellent customer service. These investments retain members and attract new ones.

Streamline operations

Cut unnecessary expenses by investing in technology that automates administrative tasks, such as membership software and bookkeeping solutions. This not only saves time but also reduces costs associated with manual errors and labor. Further reduce costs by implementing energy-efficient solutions and digitizing paperwork.

You might be wondering what’s next. How can you further improve your fitness business and continue to provide exceptional service to your community?

The answer lies in securing the necessary funds to expand your capabilities and reach. Whether you’re looking to open a new location or upgrade your existing facilities, the right financing solutions can help you reach your goals.

Take your fitness business to the next level

Secure the necessary funds to open or expand your gym. From flexible working capital loans to long-term financing options, we make it easy for you to focus on what really matters—helping your community achieve their health goals.

For more information and personalized advice, don’t hesitate to reach out to our team.

Let’s make your fitness business dreams a reality together!

Speak with a financing expert.

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