You can almost always expect gyms and fitness centers to be performing relatively well (except, perhaps, during an unprecedented pandemic), since people tend to want to stay fit, mingle with other people, etc, year-round. The past half-decade has seen a significant growth spurt in membership, which has spurred a 25% increase in new gym openings across the United States. Now more than ever before, you may be able to secure business funding to open your fitness center and take advantage of the wave.
Fitness Center & Gym Finance Numbers
There will be many things for which you will need to take an accounting if you plan on being successful with your gym. In addition to acquiring business funding for the location and building, you’ll need to be able to pay for equipment, staff, ongoing maintenance of machines, and of course insurance.
The industry has seen a 3.7% growth over five years between 2014 and 2019 (before the Pandemic hit), as well as a 6.3% growth in gym franchises over the same period. The total revenue in 2019 was a whopping $36 billion. Next, we tackle the types of loans to which you have access.
Business Funding Options for Gyms
We feel compelled to start with the option that has the best possible interest rates; these can be difficult to qualify for: the SBA federal loan – courtesy of the Small Business Administration of the government. The benefits are nonpareil, however, since you get much longer loan terms in addition to the lower monthly payments and lower interest overall.
The above notwithstanding, you can also try securing asset-based lines of credit. In this case, the loan terms are dependent on whatever assets you currently own, or plan to reliably own.
Let’s not forget the standard type of business funding: business lines of credit. These are usually unsecured, meaning that there’s no collateral required. The requirements are robust, however (although not nearly as much as for federal SBA loans) and you generally need to already have the positive cash flow to be seriously considered by the prospective lending institution.
There are more possibilities – such as the merchant cash advance or MCA, and the seller carries financing. You should look into all of them to see which type of business funding works for you. Contact Capital Finance Partners today to get your gym or fitness center funded.