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Ready, set, grow: A guide to funding your gym equipment and business growth

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Last editedJan 20204 min read

This is a guest post by Funding Options

Setting up a gym is hard work, and there are lots of obstacles you’ll need to conquer to succeed. But, once you’ve cleared the first hurdle, it’s time to think about business growth. It’s important to identify and embrace opportunities for business expansion, but once you’ve come up with a plan, there’s another question waiting for you: how to finance your strategy.

By now, there are many different lenders and types of finance that can help, and getting the right external finance can help you achieve your growth ambitions without restraining your cash flow. So, let’s have a look at the options, and what areas you can tackle to help your gym grow.


Before you choose a specific kind of funding, you should be aware that every lender will need to check your eligibility. There are a few standard things that they’ll look at, including your bank statements, annual turnover, profit margin, and credit rating, to find out how much your gym business is eligible for.

How much money you’ll be able to borrow largely depends on how the lender interprets these things. Sometimes, you’ll have a chance to talk to the underwriter to explain specific aspects of your business’s history, so the lender can take more information into account to assess your eligibility.

Another common question is ‘how long has the business been trading?’. Normally, a trading history of at least 1-2 years is required, but some providers also offer loans to startups or fairly new businesses. However, these may come with a lower maximum credit limit.

Whichever type of funding you end up applying for, it’s a good idea to get some of these standard documents ready to give yourself the best chance of getting everything sorted quickly.

Expand into larger premises

Another factor is what kind of expansion you’re looking at for your gym. Do you want to open a second branch? Expand your existing premises? Or perhaps you just want to update your equipment in the same premises? These might all sound like similar scenarios, but in fact there are different finance types that might be better suited for each.

Let’s say you’d like to move into bigger premises. In this case a business loan may be a good option, so you’ve got some working capital to tide you over until everything is settled in the new space.

There are two kinds of business loans you could apply for: secured and unsecured. If you already own valuable assets, perhaps your existing premises, you may be able to use them to secure the loan. That means if the worst happens and your business can’t keep up repayments, the lender can seize your assets to recover the loan. Put simply, secured business loans can unlock cash based on the value of your business’s assets.

On the other hand, unsecured business loans don’t require any collateral. Instead, you’ll have to have a strong business and most lenders will want you to give a personal guarantee too. This means you’ll be personally responsible if your business can’t pay.

If you’re potentially eligible for both types finance, you should bear in mind that unsecured business loans usually have a smaller loan amount, and interest rates tend to be higher — because the lender takes on more risk. On the other hand, secured loans normally take a bit longer to arrange, and the amount you can borrow is limited by the value of the specific assets involved.

Get more equipment with equipment leasing

If you’re looking for a business loan to get new equipment for your gym, you should consider equipment leasing. This way you can get new, additional gym equipment without having to pay a huge amount of cash upfront, and you’ll also be able to get regular upgrades to make sure your gym always has up-to-date equipment.

Gym equipment leasing allows you to use the equipment for a set period of time in return for monthly repayments to the lessor. You can see it as a long-term hire, which also means you’ll have to return the asset as soon as the contract is up. Technically, you’ll never own the gym equipment, so you also won’t have any asset to resell in the future.

However, this can also be a benefit to your growing business: leasing allows you to return the gym equipment once the contract ends, and replace it with an updated equipment when you start a new lease. Additionally, maintenance and insurance are usually covered by the lessor, so you don’t have to worry about it.

Use hire purchase for long-term equipment

If you’d prefer to own the gym equipment rather than rent it, hire purchase may be a good long-term solution. Just like equipment leasing, you’ll pay in more affordable monthly instalments — but unlike leasing you’ll own the asset when the last payment has been made.

Acquiring gym equipment through hire purchase can be seen as an investment, and is more of a long-term solution. However, you’ll have to take on maintenance and insurance, and usually the VAT and a deposit need to be paid upfront.

If you’re weighing up leasing and hire purchase, think about your business plan for the future: would you prefer a short-term solution with regular equipment upgrades, or do you want a long-term investment?

Real life example

One of our customers used a flexible business loan for his business Body Sculpt Conditioning. He was looking to purchase some equipment, but also wanted some working capital available for other business expenses while the new business was getting up and running.

In this situation, a business loan was a good option. This gave the new gym the flexibility to decide what to use the finance for, rather than only using finance for gym equipment specifically.

Final thoughts

Growing your gym business is an exciting project, and business finance could help you fulfil your plans. Whether you need working capital finance to boost your cash flow, hire purchase to spread the cost of expensive equipment, or the flexibility of leasing, there are many different options out there that could work for your gym.

The kind of finance you need also depends on how you want to grow your gym — and the right option will vary depending on whether you’re adding more services, getting more equipment, or hiring more staff. You may even find that a combination of equipment finance and a general purpose business loan is the right option.

Whatever you decide is right for your gym, if you need help to find the most suitable funding for your growth project, Funding Options can help.

Conrad Ford is Chief Executive of Funding Options, recently described by the Telegraph as “the matchmaking website for small businesses and lenders”. Funding Options has been selected by HM Treasury to help businesses find finance when they’re unsuccessful with the major banks, as part of the Bank Referral Scheme that launched in November 2016.@FundingOptions

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