Running a successful gym or fitness club comes with its own set of expenses, just like starting any business in Canada. But the good news is, there are countless options available to help you get the financing you need to expand, grow, and create the type of fitness center everyone will want to join.
Types of Fitness Clubs Eligible for Business Financing
There are many types of fitness clubs that are eligible for business financing in Canada. Here is a list of some of the most popular fitness clubs:
Country or golf clubs
Regardless of the type of fitness center you own, finding financing is possible for any Canadian small business. Getting approved depends on a wide variety of factors, keep reading for everything you need to know about finding the right financing for your fitness club.
How Business Loan Can Help Your Gym or Fitness Center
There are a countless number of ways a business loan can help you grow your gym or fitness center. Improvements, renovations, and even the day to day upkeep of a gym can be pricey and a business loan can help cover it all.
Fill your gym with the best equipment on the market
Cardio and weightlifting machines
Multi-purpose/core training stations
Manual weight sets
Punching bag and other boxing equipment
Install any specialty areas
Boxing ring or martial arts practice room
Yoga/Pilates/ dance studio
Pay to have promotional items manufactured
Duffel bags, hats, jump-ropes, t-shirts and sweaters, wristbands, etc.
Hire a social media coordinator to run your social media accounts
Hire the best professional
Certified personal trainers
Trainers to teach group classes
Insurance and Legal
When starting a business it’s important to insure your business in case of customer injury or property damage. In general, you may require commercial property insurance, general liability insurance, business income insurance and more. In addition to that, you’ll need to get all the permits and business licenses required to operate your business.
Renovate your fitness areas however you’d like
Hardwood floors for studios
Padded flooring for weightlifting areas
Televisions and a sound system for the cardio area
Build a swimming pool, jacuzzi area, or sauna
Build and furnish a safe daycare for the children of employees and members
Install water fountains, air conditioning, heating, ventilation and other amenities
Alternative Financing Options For Your Fitness Club or Gym
Whether you’re trying to finance your gym, yoga studio, CrossFit club, etc., you’ll notice that there are a variety of options available. Besides business loans, you can also use equipment loans, merchant cash advances, invoice financing, microloans, and a number of other credit products to cover your business’s expenses. Let’s look over some of these options and how they can help your business.
A merchant cash advance allows you to receive a lump sum of cash in exchange for a percentage of your future credit card sales. When running a gym or fitness club, a merchant cash advance can help you access cash quickly to cover any immediate expenses like replacing old or broken equipment.
In order to run a successful gym or fitness club, you’ll need a lot of equipment such as training weights, yoga mats, elliptical trainers, treadmills, etc. Unfortunately, this can be very expensive, but with an equipment loan, you’ll be able to spread your equipment costs over a set period of time.
Business Line of Credit
A business line of credit is a revolving loan that allows you to borrow money up to a certain limit and you only pay interest on the amount you use. This makes it a good alternative for short- term and small unexpected expenses your business may occur. For example, it can be used to inject cash into the business during seasonal cash flow shortages, it can also be used to fund your marketing campaign or even simply to help increase your business credit score.
Gyms and other fitness clubs usually rely on a monthly or yearly subscription from their clients. This means you have to wait a couple of weeks or months to receive payment, especially if your client is late. This, in turn, can lead to cash flow shortages. However, with invoice financing, you’ll be able to curb any disruptions to your cash flow by getting an advance on your outstanding invoices.
Canadian Businesses Who Sought External Financing in 2018
Business Loan Requirements For a Gym
When it comes to applying for a business loan to help grow your gym or fitness center, the specific requirements will depend on the financing option you choose and the lender you’re working with. But, there are several things that all business owners should have ready when submitting a business loan application.
Personal information (contact information, SIN, etc)
Business information (address, email, phone number, etc.)
Personal financial details and credit score (maybe not be required)
It’s important to note that if you’re looking to get financed as soon as possible, it’s crucial that you work closely with your lender and provide them with all the information and documentation they need. The longer it takes you to send everything they need, the longer it will take them to approve you.
Factors That Affect the Cost of Your Gym Business Loan
In addition to your interest rate, you should also consider any fees and the length of the term when determining the cost of your business loan.
Fees – When applying for a business loan for your gym, yoga club, or fitness club, you should be aware of potential fees such as origination fees and administrative fees. You should also evaluate what kind of fees are involved for prepayments as well as late payments.
Interest – When evaluating your interest rate, you should look at the APR as it represents the true cost of your loan. Unlike the interest rate, the APR is the percentage charged over the year and includes any other fees included with the loan such as origination fees.
Term Length – While a longer business loan term provides more affordable payments, it’s also more costly as you pay more interest. Similarly, while shorter terms can lead to higher payments, you end up paying less in interest.
How Term Length Can Affect Your Business Loan Cost
Business Loan Amount
Frequently Asked Questions
How do I ensure I’m getting the best rate on my business loan?
There are a few things you can do to get the best business loan rate for your gym or fitness club. One of the easiest ways you can ensure you’re getting a good rate is by using a loan comparison website to compare rates and receive quotes from multiple lenders. Another way to ensure you get a good rate is by reducing the risk you pose as a borrower. You can do so by improving your credit score by making full on-time payments and lowering your debt-to-income ratio. You can also reduce the risk you pose by securing your loan with an asset. Lenders often provide lower rates when you provide collateral as it gives them a way to recoup payments in the event you default on your loan.
Can I get a business loan for my gym if I have bad credit?
While banks and other traditional financial institutions may be reluctant to approve you for a business loan, many alternative lenders specialize in providing business loans to bad credit individuals. These lenders usually base their approval on other financial aspects such as your business sales, debt levels, assets, and more. As such, you can get a business loan for your gym or fitness club even if you have bad credit.
Should I get a business loan or an equipment loan to finance my gym?
Whether you should use a business loan or an equipment loan depends on what you’re trying to finance. If you’re looking for capital to jump-start your business, a business loan would be more preferable as you have total control over what you can use it for (i.e: marketing, payroll, business insurance, etc). An equipment loan on the other hand is a good option for financing any equipment you need to start your gym as the equipment itself acts as collateral.
What interest rate can I expect when applying for a business loan for my gym?
In general, the interest rate for a business loan can be anything between 2% and 30%. Depending on your personal and business financial health the rate you receive will vary. In 2018, a study by the ISED found the average interest rate businesses were charged for debt financing was 5.7%.
Get the Money You Need, Hassle-Free!
When you’re looking for a reliable business loan, Loans Canada can help you find the best business financing option and provider based on your needs. Some of the advantages we offer are:
Financial relief from your loan troubles, so you can spend more time concentrating on the health of your business and patrons.
Fast approval times, usually within 48-hours.
Freedom from the complicated screening process of banks and credit unions
Sensible rates and repayment schedules that are easy to keep up with
Online applications that are simple to complete on your home or work desktop, laptop, smartphone, or tablet
All consultations and conversations with Loans Canada and its partners are confidential and risk-free. Speak with a trusted specialist today and see how we can help you achieve your financial goals faster. Loans Canada and its partners will never ask you for an upfront fee, deposit or insurance payments on a loan. Loans Canada is not a mortgage broker and does not arrange mortgage loans or any other type of financial service.
When you apply for a Loans Canada service, our website simply refers your request to qualified third party providers who can assist you with your search. Loans Canada may receive compensation from the offers shown on its website.
Only provide your information to trusted sources and be aware of online phishing scams and the risks associated with them, including identity theft and financial loss. Nothing on this website constitutes professional and/or financial advice.
Your data is protected and your connection is encrypted.