It’s hard to open a gym or fitness center because these types of businesses present some unique challenges when compared to businesses in other sectors. Equipment, shower facilities, and specialized workout areas require a lot of money, and so do up-to-date POS systems to keep track of the monthly subscriptions and plans of your members.
Active gym membership has seen a surge since the onset of the Covid-19 pandemic, but many gym owners are struggling to get their gyms on par with the number of members they’ve received. But, this is where a business loan can really help. In this article, we’ll tell you everything you need to know about how to get a gym business loan.
If you’re learning how to get a gym business loan and wondering which sort of gyms and fitness centres are eligible for business loans, then you’re in luck. Practically every type of gym or fitness club is eligible.
Here’s a look at some of the most popular types of gyms in Canada:
It’s important when discussing how to get a gym business loan to also discuss how to use the loan. There are a number of ways that a business loan can be used to benefit your gym or fitness center.
You can use a business loan to add nearly any sort of fitness equipment you can think of to your gym or fitness centre. Examples include:
When discussing how to get a gym business loan, you should also know that you can use the loan to install and expand specialty areas. Some examples of specialty areas include:
You should know when learning how to get a gym business loan that you can use the loan to help with your gym’s marketing.
You can use the loan to fund the manufacturing of promotional merchandise for your gym, such as hats, bags, shirts, jump ropes and exercise bands, water bottles, and wrist bands.
You can also use the loan to fund your online social media marketing efforts. The money can be used to make improvements to your business website, or to pay for a social media coordinator.
Of course, when you’re learning how to get a gym business loan, we need to discuss using the loan to improve your staff. Here are some examples of staff positions you may want to hire for:
Another thing we should discuss when you’re learning how to get a gym business loan and how to use it is the fact that you can use the loan to pay for various types of insurance and legal aid.
Insurance is important for any gym to protect against customer injury and things like property damage. Some of the types of insurance you may need to obtain for your gym include commercial property insurance, business income insurance and general liability insurance.
Of course, we can’t have discussion about how to get a gym business loan and how to use the loan without talking about renovations. There are a ton of improvements you could make to your gym, such as new flooring, installing padded flooring in weightlifting areas, adding or purchasing new mirrors, or add TVs and sound systems.
Other renovations you could consider include adding a pool, daycare, massage chairs, improved shower and locker room areas, better ventilation, heating and air conditioning, and water fountains.
Since maintenance of the equipment would be considered a daily operational expense covered by working capital, we felt we should discuss it as one of the things you can use a business loan for in our article about how to get a gym business loan.
This can include not only upkeep on gym equipment, but cleaning the equipment, paying for technicians to service specialty equipment, paying for extra sanitation of equipment and the gym area throughout the day, and adding sanitation stations.
When you’re learning how to get a gym business loan, you should learn about the different types of business loans that gym owners can get.
Here’s a look at the types of business loans that are typically offered to gyms:
This is when a lender provides you with a lump sum of cash upfront, and then you pay it back with a percentage of your credit and debit card sales.
This is one of the fitness centre business loans that gyms and fitness centres are uniquely qualified for because a large portion of their payments come from credit and debit cards.
This is a good choice for gym owners, too, due to the amount of equipment that they typically have to buy to keep their gym or fitness centre operational. This is like a traditional small business loan, however, the equipment you buy with the loan becomes collateral.
This works like a typical small business loan in that you’ll pay it back the same way, and have similar rates and terms. The difference is that when you pay the loan off, you can immediately take out another loan for your credit limit without having to go through the loan approval process again.
This is another type of loan that gyms and fitness centers are uniquely qualified for, which makes it worth mentioning in our article about how to get a gym business loan.
Gyms and fitness centers typically make their money through monthly membership subscriptions, which means that they can wait weeks or months to make money from membership subscriptions.
But if you choose to do invoice factoring, you sell your invoices to a factoring company, they give you a lump sum advance on the invoices and you pay them back when your members pay you.
We can’t write a proper article about how to get a gym business loan without telling you what information you should have on hand when you’re filling out your application.
Here’s a list of the information you’ll need to add to the application:
Another important thing you need to know when learning how to get a gym business loan is which documents you’ll need to complete the application process.
Here’s a list of the documents you should gather when you submit your loan application:
It wouldn’t be fair for us to write an article about how to get a gym business loan and not tell you about what to look for when you get a loan.
Here’s what you should pay close attention to:
There are lots of fees associated with loans, so you should pay attention to things like origination fees, administrative fees, late payment fees and fees associated with prepayment.
Everybody tells you to watch out for good interest rates, but you should also pay attention to the APR. This number represents the total amount you’ll pay on the loan, including interest payments and other fees (such as the ones we just mentioned above).
You need to consider the term of your loan carefully. While it’s true that paying your loan off over a longer period of time means that you’ll enjoy lower payments, you’ll also accrue more interest this way, so it may not be any cheaper in the long- run.
Likewise, if you choose a shorter term, you may not have to deal with as much interest, but you’ll have higher payments.
There’s no doubt that many gym and fitness center owners have been wondering how to get a gym business loan in the wake of the pandemic. With business booming, many people have been learning how to get a business loan for a gym, and hopefully our article has helped you learn more about the process, as well.
The most important things you need to figure out before you apply for a loan are what you want to use the loan for and the loan amount, then you should be able to gather the necessary documentation and apply!
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First of all, you can reduce the risk you pose to the lender by increasing your credit score and lowering your debt-to-income ratio. But, you can also make sure you’re getting a good rate by using rate comparison websites.
Yes. However, you should know that you likely won’t find good rates or terms. It’s a better idea to improve your credit score if you can.
Interest rates can vary between 2% and 30%. This depends on factors like your credit score and your debt-to-income ratio.
This depends on the type of lender you choose, as well as the type of loan you choose. If you choose an alternate lender instead of a financial institution, you could have your money in days, rather than weeks. And, in general, cash advances are quicker than other types of loans.
This depends on the type of gym you want to open.