Running a fitness center is never easy. There are certain unpredictable costs and expenses for maintenance that all fitness center owners will face; particularly the equipment upgrades you’re obligated to make because of new trends in health and fitness.
Over time, a new fitness center builds a loyal following from nearby residences and businesses because of its convenience. Fitness centers located on major arteries can also be very profitable.
An SBA loan can help get your fitness center off the ground or expand an existing center. In addition, it can be used to buy new equipment, refurbish old equipment, purchase a competitor’s fitness center, and many other important purposes.
Benefits of owning a fitness center
Along with a high earning potential, the biggest benefit of owning a fitness center is the satisfaction of owning your own business. You set your hours, decide how many employees to hire, set your prices, and enjoy all the other benefits of owning your own company.
Owning a fitness center also means you’ll make a nice living. Owning a thriving fitness center will provide financial security and allow you to get your benefits through your company (health, life, disability insurance).
How to obtain financing to open, expand, or buy a fitness center
If you’re looking for fitness center financing, consider applying for an SBA loan. The various loan programs offered by the Small Business Administration can help provide the funding you need to set up your business.
The SBA is a government agency that doesn’t lend you the money directly. Instead, it guarantees a significant portion of your loan. That lowers the risk profile for SBA’s lending partners, which include conventional banks and financial institutions, so they’re more willing to approve loan requests.
You also must put significantly less cash or equity down to qualify with an SBA loan. And, with an SBA loan, no covenants or collateral is required.
The most common SBA fitness center loans include the SBA 7(a) and Express loans.
SBA 7(a) loan for starting or buying a fitness center
The 7(a) is the preferred SBA loan for fitness centers. You can use the funds made available through this program to purchase equipment, expand your current location, or even buy a competitor’s center.
If you own an existing fitness center and want to buy out a partner, you can also utilize the funds from an SBA 7(a) loan for that purpose.
The maximum SBA loan for a fitness center is $5 million and is generally repaid with monthly payments that include interest.
The payment stays the same for fixed-rate loans since the interest rate is locked in. However, for variable rate loans, it’s up to the lender to request a different payment amount if the interest rate changes.
SBA Express Loans for fitness centers
SBA Express Loans are a part of the agency’s 7(a) loan program. Up to $500,000 can be borrowed under an Express loan. The approval times are typically much faster for these loans.
Express loans over $25,000 have a collateral requirement. The SBA usually responds to Express loan applications within 36 hours.
The lenders ultimately make all eligibility and credit decisions. The market prime rate plus 4.5-6% interest is applied with repayment terms of up to 10 years.
How to apply for an SBA fitness center loan
Access our network of SBA lenders that includes leading nationwide banks, credit unions, and other financial institutions. Our lending partners are experienced in handling applications for fitness centers, so they will diligently pursue your opportunity.
There are countless SBA approved lenders that are ready to offer you a fitness center SBA loan. These are just some of the top lenders:
|Rank||Bank||City||State||# of Loans||Avg Loan $||Avg Interest|
|1||The Huntington National Bank||Columbus||OH||121||$331,868||6.8%|
|3||Newtek Small Business Finance||Lake Success||NY||25||$371,084||7.5%|
|9||Readycap Lending, LLC||Berkeley Heights||NJ||9||$538,311||7.9%|
|11||Wells Fargo||Sioux Falls||SD||8||$108,088||8.4%|