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Gym Equipment Financing: What Are Your Options?

Caroline Goldstein

Staff Writer at Fundera
Caroline is a small business and finance writer at Fundera. Before coming to Fundera, she received an MFA in Fiction from New York University. She loves finding creative ways to help entrepreneurs grow.

For fitness enthusiasts and health buffs, opening your own gym is a dream come true—finally, you have the opportunity share all the routines, methods, and classes that have turned your life around with a larger community. But whether you’re just starting your business or you’ve been running your boutique gym, studio, or franchise for some time now, you know that running a gym takes much more than endorphins. All that equipment needs to be bought somehow. And if you don’t have the pocket money to finance your gear (as few business owners do), you’ll need to find another way to secure gym equipment finance.

Essentially, you have two options for financing your gym equipment: You can buy your gear outright, or you can lease it. If you choose to buy your equipment, your best financing solution for your biggest purchases is a standard equipment loan; and for smaller items, or if you need your funds very quickly, you can opt instead (or also) for a short-term loan from an online lender or a business line of credit.

But if you’re cowed by the prospect of being tied down to your gym equipment—probably because the technology advances so rapidly, and exercise fads change just as quickly, too—then you can look into equipment leasing, in which case you’re simply paying the owner for the use of that equipment.

Here’s a closer look at your gym equipment financing options, and how to understand which option will work best for your gym.

Buying Gym Equipment

To stock your gym with necessities that likely won’t become obsolete anytime soon—think dumbbells, mats, fitness bands, Bosu balls, and other accessories—you’re best off buying that gear outright. In that case, you have a couple of financing options, depending on the kind of equipment you’re buying.

Gym Equipment Loans

Equipment loans are designed specifically to help business owners purchase the gear that’s integral to their operations—so we would be remiss not to mention this financing option first for your gym.

If you’re approved for an equipment loan, your lender will front you all or most of the cash you need to purchase your equipment. You’ll repay that amount, plus interest, over time; and once you’ve paid down your loan, you’ll fully own your equipment. The exact amount of money you qualify for depends largely on the equipment’s projected resale value, as the equipment itself secures the loan. (In other words, if you default on your equipment loan, your lender will simply reclaim and liquidate the equipment.)

Pros and Cons of Gym Equipment Loans

A major selling point of an equipment loan is that it lends you funds to pay for what you need right away but gives you the time to pay off that large expense gradually. And because these loans are self-collateralized, you won’t need to put up any additional collateral—and put your business or personal assets on the line—to secure an equipment loan.

Thanks to that extra security, too, eligibility requirements are a little less stringent for equipment loans than they would be for unsecured loans. So, if your credit score is challenged, or if you’re a new or as-yet-unprofitable business, you might still have a shot at approval for an equipment loan.

On the downside? You do need to pay interest as a part of your repayment plan. If the equipment you’re purchasing is less valuable, or if your business’s financials or credit scores are struggling, you’ll end up with a heftier APR. Also know that if your lender doesn’t offer you 100% of the cash necessary to buy your equipment, you’ll need to make up the difference out-of-pocket as your down payment.     

gym equipment finance

Online Loans for Gym Equipment

If you need to purchase smaller items or incidentals for your gym—think soap and towels for the lockers or blocks and blankets for the yoga room—then consider a short-term loan or line of credit.

Short-Term Loans

Short-term loans from online lenders generally have shorter terms (as you can guess) than equipment loans—usually between three and 18 months—and lower capital amounts. But thanks to their less rigorous qualification standards than conventional bank loans, short-term loans can be an accessible option to more business owners. And because the application is online, the process is relatively quick and painless. That makes these loans a great option for gym owners who are in a rush to purchase less expensive pieces of equipment.

Business Lines of Credit

Online lenders can offer business lines of credit, as well. In this case, your lender will extend you a predetermined amount of cash that you can dip into whenever you need to, and in whatever amount you need. You’re only responsible for repaying what you’ve used, plus interest. So, lines of credit are an ideal financing solution for business owners to cover smaller, unexpected expenses—like, for instance, your foam rollers and wrist wraps that have mysteriously gone missing.

Also know that a line of credit isn’t mutually exclusive with any of the loan or leasing options mentioned here. In fact, it’s a useful solution for many business owners to have in their back pocket, just in case the need arises for extra funds.         

gym equipment finance

Gym Equipment Leasing

Essentially, an equipment lease means that you’re paying a monthly fee to rent that equipment from the title holder—which, in this case, is your lender—for as long as your leasing agreement lasts. For gym equipment, that agreement may last anywhere from six months to several years.

At the end of your lease, you’ll have a few options: You can renew your lease, buy the equipment at its fair market value, return the equipment to the partner, or upgrade to a new piece of equipment. For that reason, it might be smart to lease machines like treadmills, elliptical machines, stationary bikes, and similar equipment whose technology and models advance rapidly.    

Pros and Cons of Gym Equipment Leasing

Another advantage of leasing your gym equipment is the tax advantage (and that’s one of the best kinds of advantages, right?): Depending on the specifics of your deal, you might be able to include your monthly lease payments as a deduction on your tax returns. Of course, you’ll need to double check with your equipment leasing company and your business accountant to be sure those expenses are legitimately tax deductible.

And luckily, finding gym equipment finance companies is relatively simple—as is often the case, Google might be your best friend here. As a bonus, many gym equipment finance companies take a holistic approach to underwriting, meaning you likely won’t need to provide years’ worth of financial documents in your application, and they might also consider businesses with challenged credit scores.

Another selling point is that there’s a chance your equipment lease includes maintenance services, in which case you don’t need to worry about paying for that out of your own pocket. And because you’re not purchasing your equipment with a lease (unless you choose to down the line), you won’t need to provide a down payment to secure your deal.

That said, equipment leasing can become costly over time. Because you won’t pay interest on your monthly rental bills, your lender may hike up those monthly payments to make up for the revenue they’d gain if there were interest attached. In some instances, you might actually end up paying more by renting that rowing machine than you would if you’d bought it outright.

gym equipment finance

Which Gym Equipment Finance Option Is Best for Your Gym?

As is always the case with small business financing, the right kind of gym equipment finance solution for you depends largely upon your business’s unique needs.

If you have a single, clear purchase in mind—say, you need 10 treadmills exactly—then your best financing method is probably an equipment loan. An equipment loan gives you access to funds to buy exactly what you need, when you need it, but pay off the purchase over time; and the more valuable the equipment is, the more cash you’re likely to get from your lender. Keep in mind, though, that at the end of your loan you’ll own that equipment. Make sure it’s not a piece of equipment that you’ll end up getting rid of or upgrading in just a few years.

And if you do anticipate upgrading your equipment, go for an equipment lease instead. In this financing arrangement, the lender actually owns the title to that equipment. So when your rental is up, you can easily trade it in for a newer model.

Don’t rule out a short-term loan from an online lender if you need to purchase less expensive gear or accessories very quickly, and a line of credit makes for a handy, flexible funding source in itself, or to complement another type of business loan. Use your line of credit to cover incidental or unexpected purchases—not necessarily that fleet of spin bikes.

To discover your loan options even more efficiently (and with less stress), work with a loan specialist. Leave them with the loan-related heavy lifting, so you have more time and energy to lift actual weights.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

Caroline Goldstein

Staff Writer at Fundera
Caroline is a small business and finance writer at Fundera. Before coming to Fundera, she received an MFA in Fiction from New York University. She loves finding creative ways to help entrepreneurs grow.

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