The popularity of gyms, health clubs, yoga studios, pilates and groups like CrossFit continues to grow. Americans are living healthier lifestyles. They want to stay in shape. Small business loans for gyms can help your fitness center keep up with growing demand. These four secrets will help you choose your business loans wisely.
SECRET #1: SMALL BUSINESS LOANS ARE A FINANCIAL MANAGEMENT TOOL
Smart borrowing allows you to be proactive in growing your fitness center. It helps you conserve cash, by making payments instead of making an outright purchase. This is helpful when you’re making large purchases for equipment or inventory. For smaller purchases such as supplies, using business credit cards also helps manage your cash.
Smart borrowing allows you to quickly meet unplanned needs. Emergency repairs are worse than a nuisance. Patrons get cranky when your pool or a piece of equipment is unavailable. With the right small business loans, you can resolve these problems right away. Business loans also let you jump on new opportunities. What if your staff has an idea for a great new program, but you’ll need supplies and advertising? No problem.
What kind of business loan should you consider? Ask yourself:
- Why do you need the money?
- How much do you need? Be clear on this. Under-borrowing leaves you short. You won’t be able to achieve your objective. Over-borrowing wastes money on interest and makes repayment more difficult.
- Is this a short-term need or a long-term investment?
Suppose it’s time for a major overhaul. With a well-thought-out master plan, you can schedule the work in phases. Small business loans support that. You can tackle each phase’s financing needs separately. You can borrow less money each time. This is smarter than taking out a huge loan up front. Why borrow money now, when you won’t need it for months? Or even a year or two?
Strategic use of small business loans can help improve your business credit. You’re showing you can borrow responsibly. That increases your chance of getting more favorable loans in the future. Lower interest rates. Or easier payment terms.
SECRET #2: YOU HAVE TO TAKE A HOLISTIC APPROACH
It’s important to understand the range of options when it comes to small business loans. Different loans serve different purposes. And they each have pros and cons. My advice is, don’t automatically discount anything. You might want to use:
- Conventional business loans
- Short-term business loans
- Accounts receivable factoring
- Merchant cash advances
- Equipment or inventory financing
There are business financing options you use every day, but you probably don’t think of them as “loans.” Business credit cards for instance. A business line of credit is another example. These are, in fact, sources of working capital. You can borrow money up to your credit limit. You can pay it back right away, or make payments. Once you repay, you can borrow that money again.
How you use these loan products affects your ability to manage and grow your business. That’s why a whole-business approach is so important.
Here’s another secret: Did you know there are business loans and resources created to support women entrepreneurs? That’s great, because we’re seeing more women owners of fitness facilities these days.
SECRET #3: AVOID DEPENDENCY ON SMALL BUSINESS LOANS
I’m not suggesting you should rely on loans to operate your fitness center. Business loans are for special needs. I know you may have cash flow problems — most small businesses do. But you have to study and understand your cash flow. When and why do you have problems? The right business loans can smooth your cash flow. And give you more working capital to grow your club.
That said, you need to constantly work at increasing revenue. Another way to get more cash is to reduce costs. Health Fitness Management says every facility manager should strive to control expenses. Three recommendations:
- Always compare costs vs. benefits. Why are you making this purchase? Is this the best value? What will it do for your business? Should you lease rather than buy? Should you pay cash, or look for a small business loan? Apply cost-benefit analysis to your programs, too. Are you sure they’re profitable? You have to compare revenue against total costs. That includes overhead, staffing, insurance, advertising, and space required.
- Every time you reduce total cost or payment terms, you save money.
- Consider buying used. Brand new fitness equipment is essential when you’re upgrading. But used kitchen or maintenance equipment can save you serious money.
SECRET #4: DEVELOP A RELATIONSHIP WITH YOUR LENDER
It’s exactly like developing a relationship with a personal trainer or coach. You encourage your members to do that, don’t you? Your members know how to use the equipment. Or how to swim or play tennis. But trainers and coaches have expertise beyond that. Knowledge and experience that can help each individual get the most from their exercise program.
When it comes to financial fitness, United Capital Source is your trainer and coach. You know how to run your business. And how to cater to your particular patrons. Our people also understand what it takes to manage a successful gym or fitness center. But your account rep will go beyond that. They’ll take the time to learn the details of your business. Your current challenges. Your long-term goals. That’s what makes UCS different. It gives us more muscle to advise you.
We serve as your spotter – watching your back to be sure you get the right small business loans at the right time. Helping you get fast cash if you stumble. We also serve as your cheering section. And, frankly, that’s our favorite part. Our #1 mission here at UCS is to support small businesses and watch them grow. Nothing makes us happier than applauding your success.
Fitness centers are a growth industry. We know you want your facility to be part of that growth. We can help you uncover the secrets of small business loans. And that will help keep your business healthy and fit for the future.