Over the past five years, the gym and fitness industry has literally exploded in this country, with the number of fitness centers increasing by 25%. Whether people use it to avoid long-term illnesses, for personal enjoyment, or to obtain better health, the number of fitness centers and their quality has been steadily growing for the past several years. Lenders and investors are aware of this continuing trend and are more than willing to invest in the right kind of opportunity when it shows promise of a good return.
One of the best sources for funding for your new gym might be an SBA loan because it typically offers the lowest interest rates, as well as low monthly payments and longer-term loans, which give you more time to pay it back. Asset-based lines of credit generally carry low-interest rates as well because they’re not as risky as other types of loans since they’re secured by collateral.
You might also be able to obtain an unsecured business line of credit, which requires no collateral to secure the loan. However, unsecured business lines of credit typically require fairly stringent qualifications for approval, and it will also be necessary to demonstrate a robust positive cash flow. Some businesses prefer to acquire funding through merchant cash advances because they offer short-term financing at the same time that they provide quick access to upfront cash.
Another route that you might be interested in is seller financing, if you can find a seller who is interested in either partially or fully financing the gym, so you can move in and set up your operation. In a scenario like this, the buyer and seller would negotiate the terms of the gym sale, and the repayment time is generally in the neighborhood of 5 to 10 years. There are, of course, a great many more funding sources than these, but in the current economic climate, these are the most frequently used methods of acquiring cash needed to open up your gym.
Thinking of Opening up a Gym?
There is definitely a fitness craze occurring in this country, and if you’re in a position to capitalize on this, it might be very lucrative. If you need business funding for your new gym, contact us at Eagle Bend Capital Financing.