Equipment is one of the biggest costs when it comes to gym ownership, whether that’s opening a new gym or refurbing an existing one. Treadmills cost between £1,500 - £2,000 per unit, and even smaller items like dumbbells can cost £500 for comprehensive, heavy-duty sets. That’s where gym equipment finance can help you hit the ground running and offer a better service to your clients.
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The usual alternative to buying is renting equipment, but while this can save you money in the short term, it’s more expensive in the long run. If you don’t have the cash needed to pay upfront, you can still kit out your gym in style.
Here’s where getting gym equipment on finance becomes a good option, which can come in the form of asset finance and equipment finance. Let’s look at both these gym equipment finance options in-depth and how to make the right choice for your business.
The most common reason to finance gym equipment is the cost of the products required to offer a competitive gym experience – from weights to treadmills – which can add up fast.
Financing gives gym owners the capital needed to invest and start generating revenue from the equipment without having to wait for cash on hand. Even if you have the funds to buy up front, spreading equipment costs across manageable payments may be a good idea. Finance smooths out your cash flow and preserves the working capital needed to handle unexpected costs and manage day-to-day operations.
Finance, with regular, set payments, makes it easier for you to budget and plan for growth, without depleting your cash reserves). It can also give you more choices about the type and quality of gym equipment you’re getting. Paying upfront might mean buying second-hand or choosing more basic kit, whereas finance means you can buy premium equipment without big, upfront payments, helping you meet (or even surpass) the industry standard.
There are a few different financing options available to you. The three main ones you’ll likely be interested in are asset finance, equipment loans, and 0% finance options.
Asset finance lets you lease or buy essential assets over an agreed time. A lender gives you the money needed, after which you then repay in regular instalments, using the assets themselves as collateral.
There are different types of asset finance, like leasing (where you rent the assets) and hire purchase (where the business owns the asset after all payments are made).
The main difference between hire purchase and leasing is who owns the asset. With leasing, the leasing company retains ownership of the assets. With Hire purchase, ownership of the asset is with the hiring business.
Hire Purchase may also cost more each month. This is because you pay depreciation, tax and interest costs. (Find out more on the difference between finance leasing and hire purchase here.)
Equipment financing is a more targeted type of finance. It’s a loan that helps you buy equipment and machinery. In most cases, the loan is secured against the equipment.
Equipment finance generally falls into two categories:
Long-term (or Capital) Lease: This is a non-cancellable agreement. You’d use this to finance equipment for long-term use, and you’ll usually be able to buy the equipment at the end of the lease period.
Operating Lease: This is a short-term agreement and you can cancel before the end of the lease period. You’d use an operating lease if you plan to use the gym equipment in the short term or plan on replacing the equipment after the lease ends.
Some lenders offer 0% interest if loans are paid back within an agreed time. The benefit of this kind of finance is in the name: 0% interest. But it does have a few catches.
If you’re looking to start or upgrade your gym, equipment finance can be a flexible, cost-effective and practical way to get the hardware you need. However, the costs and concerns when running a gym can extend well beyond equipment, from premises costs to payroll and advertising. That’s where a flexible finance option like an iwoca Flexi-Loan could provide the space you need to adapt to whatever comes your way.
Our Flexi-loan agreements aren’t tied to a particular asset. Once you’re approved, you can draw down funds as needed, and only pay interest on the amount you actually use. For example, perhaps you take out a loan to buy gym equipment but later decide you’d like to ramp up your marketing spend, or suddenly need to carry out urgent repairs or cover payroll in a lean month. It’s business finance that works around your needs.
