- Adjust your mindset: Finding a solution to an obstacle becomes easier if your mind is in a problem-solving track.
- Put in the time: Finding funds to get new equipment takes time. The best way to get started with gym equipment financing, is to set an amount of hours weekly or daily to finding ways to bankroll your enterprise.
- Get out of your comfort zone: Growth in any shape or form is never comfortable. Adjust your expectations accordingly, learn about budgeting, and talk to other gym owners about how they financed their fitness business.
9 Reasons Why Fitness Equipment Should Be Purchased New
The cost to open a gym mainly depends on the price of the equipment.
Still, the equipment is you have at your gym can be a decisive factor between people becoming members or finding a different option. Here are some reasons why you should buy new fitness equipment instead of using second-hand gear:
1. Higher quality: Most workout gear is iron-based, which can rust easily. This means old equipment won't offer your members proper service and its effectiveness will be reduced by 10-30%. With new equipment, your clients will be able to have effective circuit training and achieve the desired outcome.
2. Higher durability: When you buy used workout gear, you don’t know for sure how long it’s been used for and whether the previous owner handled it properly. This means the durability of your gear is uncertain. By buying new gear, you know exactly how to take care of it and how long it will last for.
3. Warranty: Speaking of how long your gear will last for, when you purchase new equipment it comes with warranty. That way, in the unlikely event that it breaks down, you can get it exchanged for a fully functional one within the warranty period.
4. Increased safety: Used equipment may have hidden damage that you’re not aware of and can lead to gym members becoming injured or getting an infectious disease.
5. Staying competitive: Cutting-edge equipment not only keeps your gym members safe, but gives a competitive edge to your business. What would you prefer as someone in a gym program: rusty old equipment or doing a workout carefree with new equipment?
6. Overhead costs: When your fitness equipment is new, it means you have to invest fewer costs in repair and there is decreased time when the equipment is out of use for reparation and servicing.
7. Keep gym members happy: Upgrading equipment to new one, especially cardio units, could help in keeping existing gym members.
8. New opportunities: New gear is useful if you want to revamp your program by opening new classes, groups, boot camps, etc.
9. Keeping up with trends: Like in many aspects in life, people get really into trends. By offering a space where they can satisfy their needs, you’ll ensure old gym members keep coming back while attracting new potential clients.
Equipment Financing vs Leasing - Which One Is Right For Me
New gear often equates with having to spend thousands out of pocket or finding capital to finance it. This can quickly become overwhelming if you don't have a plan and priorities on your financial needs in place. The easiest way to get started is to ask yourself, is my business best suited for equipment financing or leasing?
The key difference between leasing and financing equipment is ownership.
- Leasing equipment: You make monthly or yearly payments to a lender who owns the equipment, but you use it. When you don't need the equipment anymore, you can return it and stop making payments. This affordable option is ideal for smaller businesses.
- Financing gear: When you finance equipment, you take out a loan you'll have to pay back to the lender over months or years. Once you finish all your payments, you'll own the piece of equipment. However, equipment financing can be costly and has high interest rates, this is ideal for large-scale businesses with a considerable cash flow. You might like to read more about the best equipment financing options and how do they work.
Why Using the Equipment as the Guarantee Is More Beneficial To Your Business vs Cash Flow
When you invest in new equipment, it becomes an asset. Once your business has assets, you have more options than an individual to borrow money from a bank or other financial institution to fund your enterprise or engage in a major purchase.
Asset-based lending allows companies to borrow money based on the value of assets. A recipient (in this case your gym) receives this form of financing by offering inventory, in this case your equipment. This ensures the lender that if your business fails to repay the loan, they can sell the assets to recoup the value of the loan they gave your business. Ultimately, once you have assets, it becomes more attractive to lenders to accept your loan applications and grow your business.
SBA Loans: Alternative to Equipment Financing
SBA loans are great for fitness equipment financing because they are guaranteed by the US Small Business Administration, which makes them less risky for lenders. You can use these to borrow large amounts of money, up to $5 million, even if you have bad credit. Here are a few that would come in handy when financing gym equipment:
- The SBA 7(a) Loan Program: The SBA’s most common loan program. It lets business owners get loans and lines of credit for almost any purpose, such as working capital, purchasing equipment or real estate, refinancing debt, and more. You can access up to $5 million in funds with a 5-10 day turnaround time.
- SBA CDC/504 Loan Program: Long-term, fixed-rate loans for companies that want to finance the purchase of major assets. This can include real estate, buildings, or machinery. Typically, the business owner must show that these purchases will encourage business growth and job creation. You can access up to $5 million in funds, but must have tangible net worth under $15 million.
- SBA Microloan Program: If you have a small gym business, this might be right for you. SBA microloans are designed for startups, entrepreneurs, freelancers, and small businesses that don’t need significant funds. These loans offer up to $50,000 and have less stringent credit requirements, making them a good choice for borrowers who only need a small influx of cash.
- SBA Express Loans: Quick loans for small amounts. Where it can take up to two weeks to get a lending decision on a typical SBA loan, SBA Express loans offer a decision in just 36 hours. The drawback is that these loans have much lower limits than typical SBA loans and that they can come with stricter underwriting requirements. However, if your business needs quick funds, they can be a good choice if you need a maximum amount of $500,000.
Business Mentoring Organizations That Could Help
If this is your first time purchasing gym equipment, getting business mentoring might be a good way to get started. This way you’ll save yourself hours of trial and error as well as stress from the process. Here are a few business mentoring organizations that can help:
- Small Business Development Centers: Ideal for small businesses, these centers make it easy to find assistance and counseling in your area to start, run, or grow your business.
- SCORE: Whether you need help getting started, growing or transitioning your business, this non-profit organization offers free advice from business experts.
- Networking Events: You can decide if you want to join a virtual or in-person one, there’s sure to be one in your area. Look up industry-related Facebook groups to get started, they often have events near you.
Where To Buy New Equipment For Your Gym: Shops vs Manufacturers
If you're setting up a gym, you want to make sure the fitness gear you acquire is from a reputed brand or a well known manufacturer in the industry:
- Shop: Getting your equipment from a store means you have a variety of fitness gear to choose from at different price ranges. This means you can select the exact machine you want that suits your workout program requirements or your budget.
- Manufacturer: When you buy from a well-known manufacturer, you're investing in quality with the help of experts who can guide you in selecting the right equipment for your gym's needs. Additionally, you’re skipping the middlemen and can get a deal on your purchase.
What To Keep In Mind When Buying New Fitness Equipment For Your Gym
When the time comes to purchase new equipment for your gym, don't let yourself become overwhelmed by the process. Make sure you take your time and research fitness equipment before you pay for it. Here are a few things to keep in mind:
- Assess your fitness needs
- Understand different types of gym equipment
- Know how much space is available
- Buy from reputable stores
- Determine what equipment features you require
- How much repair and maintenance the equipment will need
Should I Repair or Replace My Fitness Equipment?
All equipment has a lifespan. Often equipment lasts between five and ten years depending on the maintenance and repair it gets. As a general rule of thumb, you know you have to replace a piece of gear if you spend more money fixing it or time placing an out-of-order sign on it than it’s in use.
How To Take Care Of Your New Fitness Equipment Properly
Each piece of equipment has its own repair and maintenance needs. To give each piece of fitness gear optimal care, make sure you read the manual and give it maintenance in a timely manner, so it will work seamlessly for a longer period of time.
New fitness equipment is the best choice for your gym. While buying it might be a financial challenge, these resources make the process easier. Make sure you take the time to carefully evaluate your needs before investing in new equipment, this way you’ll be putting money towards the growth of your business and get your gym members excited about the new acquisitions. You might like to read more about the best gym equipment financing options before you make a decision.