Do you have a business in the fitness industry? Is the company new or undergoing expansion? If so, purchasing gym equipment can require a sizable investment. While it is not the only way, financing treadmills, weights, and stationary bikes makes sense for many gym owners as it allows them to better manage their cash flow. And, fortunately, there are various financing options available. Ranging from traditional banks to alternative lenders – there are plenty of ways to help your fitness business grow.
| Lender | Ideal For | Key Features | Interest Rates | Repayment Terms |
|---|---|---|---|---|
| Canada’s “Big 5” Banks & Credit Unions | Good credit; long-term loans | Competitive interest rates; long repayment terms; strong reputation for stability | Low (competitive) | Longer, flexible |
| Swoop Funding | Quick, asset-based funding; accepts bad or low credit | Simple application process; transparent fees; flexible terms for various business sizes | Moderate to competitive | Flexible |
| Merchant Growth | Poor or fair credit accepted; Quick Funding. | Offers loans to businesses with less-than-perfect credit; flexible options available | Higher than banks | Variable |
| Driven.ca | Poor or fair credit accepted. Quick funding needed | Streamlined approval process; fast access to funds | Slightly higher than banks | Flexible |
| SharpShooter Funding | Small and medium businesses with bad or no credit | Quick, straightforward application process; accessible to businesses with variable credit | Higher than banks | Short to medium-term |
| Journey Capital | Poor or fair credit accepted. Quick funding needed | Accessible to businesses struggling to secure financing elsewhere; specialized for low credit | Higher with less favorable terms | Short to medium-term |
Reasons to finance gym equipment
You may be wondering, “why should I finance gym equipment anyway? Can’t I buy it outright?” While you can, it doesn’t always make sense. Financing gym equipment can help preserve cash flow by allowing business owners to allocate resources to other important areas. For example, instead of using your available funds to buy the equipment directly, you can instead finance the purchase. This provides flexibility and allows you to spend money on marketing, staffing, and other necessary expenses.
Challenges for those with bad or no credit
Securing financing can be challenging for borrowers with bad or no credit. This is because traditional lenders (like banks) typically require borrowers to have strong credit histories. In this case, it may be difficult for your business to qualify if you have poor credit. However, alternative lenders may be more flexible. They offer opportunities for businesses to secure financing despite credit challenges. The downside is that these loans often come at a higher cost, with elevated interest rates and less favorable terms compared to traditional options.
How to get a loan for gym equipment
1. Canada’s “Big 5” banks & Credit Unions.
Major Canadian banks (BMO, CIBC, RBC, TD, and Scotiabank) all offer gym equipment financing. These financial institutions can often provide the most competitive interest rates and longest repayment terms. For those with good credit, the “Big 5” are usually the best choice for financing. Credit unions are an excellent option for gym equipment loans. They are typically more lenient in evaluating credit history and still provide lower interest rate loans.
2. Swoop Funding
If you are looking for an asset-based loan, Swoop Funding has you covered. Catering to businesses of all sizes, they offer a simplified application process. This ensures hassle-free approvals. Swoop also stands out for its transparent fee structure and flexible repayment terms – it is an excellent choice for fitness businesses that need quick funding.
3. Merchant Growth
Do you have less-than-perfect credit? If so, Merchant Growth might be for you. The lender provides flexible financing options for companies that may not qualify for traditional bank loans. Remember, though, interest rates tend to be higher with alternative lenders than conventional banks. Read our review of Merchant Growth.
4. Driven.ca
If you need quick access to funds, Driven.ca could be the right choice for your fitness business. The lender’s approval process is streamlined, allowing them to offer flexible funding quickly. The trade-off of speedy financing is interest rates that are slightly higher than traditional lenders offer.
Read our review of Driven.ca.
5. SharpShooter Funding
SharpShooter Funding has specialized financing options for small and medium-sized businesses that need quick funding. Their application process is straightforward. BUT their interest rates are typically higher compared to banks. This reflects the increased risk they take by lending to borrowers with less stable credit.
6. Journey Capital
Journey Capital extends financing solutions for businesses with poor credit – or even, no credit. They are a solid choice for those struggling to secure financing elsewhere. Be sure to note that loan terms may be less favorable than those provided by traditional lenders.
Read our review of Journey Capital.
7. Other Online Lenders
There are other online lenders in addition to those described in this list. Focusing on speed and flexibility, you can also consider these lenders for gym equipment financing. But, as with any alternative lender, be sure to evaluate the terms of their loan compared to other traditional options. Often, accessibility and speed come at the cost of higher fees and less favorable lending terms.
What should I look at when selecting a lender?
If you are looking for financing, you are likely aware of how many options exist. What is the right choice? To determine the best fit for your gym (no pun intended), evaluate BOTH the benefits and drawbacks of each lender. Traditional banks typically offer better terms and lower interest rates – in return, they require a higher credit rating. Alternative lenders such as Merchant Growth, Driven.ca, SharpShooter Funding, and Journey Capital can all provide financing to those who do not qualify for traditional loans. While these lenders are CLA-certified and have solid reputations, their financing typically comes at a cost. In exchange for financing, be prepared for higher interest rates and stricter repayment terms.
When deciding between alternative lenders and traditional banks, we encourage you to carefully evaluate the TOTAL cost of borrowing. This means you should consider fees, interest, and any other hidden costs before choosing an alternative lender.
How to qualify for better financing
One of the best ways to get better interest rates and financing terms is to improve your credit score. To do so, gym owners can consider the following options:
- Pay your bills on time. This is essential to building a positive credit history. You can also consolidate your debts to make it easier to manage your debt payments.
- Reduce existing debt to help lower your credit utilization ratio. A lower ratio has a positive impact on your credit score.
- Check your credit report for inaccuracies. Errors happen, but these mistakes can harm your credit rating if not dealt with.
- Establish or rebuild your credit history over time by responsibly using the gym’s credit cards and lines of credit.
In addition to improving your credit, be sure to responsibly maintain the business’ finances. Lenders will look closely at the gym’s financial statements to assess its stability and profitability. Keeping well-organized accounts and showing consistent revenue growth can significantly increase your approval odds.
Also, consider including a comprehensive business plan in your financing application. How will the new equipment enhance your operation? Will it drive revenue growth? Include this information in your application, plus consider showing other supporting documents (tax returns, bank statements, equipment quotes, etc.) to help create a strong impression during the review process.
Debt relief options for those struggling with bad credit
Do you have existing debt? If so, we recommend addressing this before seeking additional financing. Debt relief options (credit counseling, debt consolidation, and consumer proposals) can aid in reducing the financial burden on business owners struggling with bad credit.
Credit counseling services provide personalized guidance, allowing business owners to create repayment plans and negotiate with creditors. Debt consolidation loans are another option – they combine multiple debts into one, making payments more manageable. There is still hope for those with an even more significant debt burden – a consumer proposal, for example, can provide structured solutions to manage debts more effectively.
For more debt relief options, visit 14 Best Debt Consolidation and Relief Programs Companies in Canada 2024.
The bottom line
Choosing the right financing option for gym equipment can be challenging – especially for those businesses with subpar credit or startups with little credit history. While traditional banks and credit unions offer the best rates for those with good credit, alternative lenders like Swoop Funding and Merchant Growth provide a valuable solution for businesses needing more flexible options. However, this flexibility often comes at a higher cost. It may mean elevated fees and increased interest rates.
In order to select the right financing option, be sure to evaluate your financial situation and consider your long-term goals. Does it make sense to find a local lender in Alberta, BC, or Ontario that offers tailored programs to residents? Either way, we recommend taking steps to improve your business’ credit, as it can lead to better financing opportunities and a more stable financial future for your business.
Lauren has over 13 years of experience in wealth management and financial planning. She is a CFA charterholder and holds a Bachelor's degree in Finance. Lauren has worked with several asset management firms, offering wealth advisory and portfolio management services to high-net-worth clients.
