Deciding to renovate your fitness facility with equipment financing is a big step. To put it in another way your investment will prove to be lucrative if you understand how to manage your cash flow.
Whether you are adding high tech experiences, upgraded equipment, or remodeled fitness space, upgrades will keep clients coming through the doors.
Certainly, these big improvements will bring future business. But, it can be challenging to manage your cash flow, understand financing, and develop a solid plan for your fitness facility renovation.
Budgeting Basics
Although upgraded fitness equipment is important to your renovation, there are several other expenses to consider.
In general, consider building a budget that addresses every expense that may occur during a fitness facility renovation. Be sure to include these often overlooked line items:
1. Equipment
To begin with, fitness facilities are expected to replace and upgrade equipment every two years. As long as you budget for this expense with equipment financing you shall never lose client/s due to outdated equipment. Also, consider equipment loans to ensure that your facility has state of the art equipment that can be upgraded regularly.
2. Flooring
The layout of flooring is an important part of your fitness facility renovation. Clients expect separate spaces for free weights, cardio classes, athletic training, circuit machines, etc. The flooring in each of these areas should be appropriate for the activity.
3. Installation
Once you have purchased the equipment, how will it be assembled and installed? Be sure to add a line item to account for the labor and materials involved with the finishing touches for your new facility.
Once your design and basic budget are complete, building a financing plan with an equipment financing strategy is the next step.
Even if you have cash saved for the project, unexpected obstacles arise during every renovation project and it is best to keep cash as an emergency backup plan. Here are a few different types of financing options to consider:
(A) Construction Loan
If you plan to remodel your building or space with structural changes, new flooring, paint, or any other renovation that involves hiring a general contractor, consider a construction loan to keep your cash freed up during the process.
(B) Equipment Loans
Equipment financing, even with bad credit is important to consider when creating a budget for your fitness facility renovation. If the cost of new equipment is holding you back, used equipment financing is available.
Benefits of Financing Club or Fitness Equipment
There are many reasons why financing fitness equipment is the smart choice for fitness facility owners. Here are just a few of the benefits:
- Client Retention. As updated equipment comes to market with newer technology and proven results, financing equipment allows owners to make immediate improvements and upgrades. “Buy back” programs allow ongoing equipment upgrades without impacting your cash flow. Clients maintain memberships at clubs that keep up with the latest equipment.
- Reduced Financial Risk. State of the art equipment comes at a cost. Financing your commercial fitness equipment allows you to maintain financial security with manageable monthly payments.
- Brand Recognition. Fitness facilities that regularly upgrade their equipment make a name for themselves. Additionally, outfitting your fitness club with recognized fitness equipment brands helps to gain and retain clients.
SBA Fitness Equipment Loans
There are several ways to finance new fitness equipment.
If you have already tried to finance with your traditional bank and are unhappy with the results, another option is to seek a SBA enhancement. SBA loans are similar to traditional loans with the main difference being that the Small Business Administration will cover a percentage of the SBA lender’s losses if your business defaults.
Fair Market Value Lease
A traditional lease agreement that typically offers lower monthly payments than a buyout, fair market value leases provide a few options when the term of the equipment lease ends. The options include renewing the lease, returning the equipment, or buying out the equipment with a cash payout.
Dollar Buy-Out Lease
This fitness equipment program allows you to “buy” your equipment for $1. If you know that you want to keep your equipment beyond the lease, this is a great option for you.
Equipment Leasing
First Capital Business Finance specializes in heavy equipment financing for purchases of more than $100,000. Or get financed on your fitness equipment as part of your renovation. Another option is to reach out to your local bank, however, many banks will include fitness equipment leases as part of your available credit, thereby reducing your credit line limit.
Equipment Financing
First Capital Business Finance provides you with the best equipment financing option/s for your business. With easy financing options for your fitness center, you can easily start or expand your business. Contact our team to know the amount you can be pre-qualified for. Many programs work great for start-ups, and even experienced businesses.
Can You Qualify for Fitness Equipment Financing With Bad Credit?
If you are plagued with a less than perfect credit score, there are still options available. “Corporate only” financing may be an option for your business if you have been in business for more than 5 years. Asset based direct lease programs are also viable options for business owners with low credit scores.
If you’re looking to upgrade your fitness equipment, First Capital Business Finance is here to help. Contact us today to learn about our flexible lease and financing options or to apply for your loan now. Or if you prefer to speak to one of our advisors, they can help pre-qualify you with a quick 5 minute call on our toll-free number 888-565-6692.
