Tips On How You Can Grow A Gym Business & Secure Business Financing

Accessing sufficient capital is difficult for independent gym businesses because traditional lenders like banks consider them risky ventures.

Raising small business capital is also a drawn-out process, especially with poor credit. While many gym business loans do not have a minimum credit score, most lenders work with a range they consider acceptable for their small business loan requirements.

So, how do you navigate the financial world and figure out how to grow your small business and secure gym business financing?

How To Select the Right Funding for Your Gym Business

There are plenty of business loans available, but you should know how to get the best rates on financing to grow your small business.

You need to understand the available loan options, loan duration, and terms and conditions. Once familiar with these basics, find out the available funding categories.

Key Methods of Funding Your Gym Business

Once you have calculated the amount of startup funding, you need to choose the most appropriate funding method.

Here are the available sources of finance you should consider for your small business.

Bootstrapping

This is a form of self-funding where you leverage your personal financial resources to get your enterprise going.

The money can come from your savings, family, friends, or your 401(K).

Self-funding gives you the freedom to have complete control of your business and take on the entire risk burden.

If this is one of your business financing strategies, ensure that you don’t go overboard with your spending. Work with what you can afford and be careful when dipping into your retirement funds.

Venture Capital Funding

Investors can offer you small business financing for growth. Venture capitalists typically seek out viable, innovative business ideas that show the potential for future profitability.

Investors exchange capital financing for share ownership in your business.

Unlike banks and other traditional lenders, venture investors take on more significant risks and are willing to invest their money based on future projections. This financial form of investment also has a longer investment horizon than traditional financing.

Understand the venture capital terms of engagement before making a deal since some investors may want a controlling stake in the business that you struggled to set up.

Alternative Gym Financing

This is by far the most popular choice for financing a small gym business. Alternative financing options are especially popular for those who need access to funds fast or may have trouble accessing financing options from banks.

The typical requirements for alternative financing depend on how long you’ve been in business or your average monthly revenue. If you’ve been in business for more than 6 months and you’re earning over $10,000 per month in revenue, you will qualify for most options.

When applying with us, you’re immediately paired with a Gym Business Financing Advisor that can help you navigate the different options depending on your needs. It’s our goal to get you financing as fast as possible with the terms you’re comfortable with.

SBA Loans

How to get a loan to start a business from the government? The U.S. Small Business Administration (SBA) collaborates with appointed lenders to lend money to small-scale enterprises.

SBA has a set of guidelines used by partner lenders, micro-lending organizations, and community organizations to disburse funds to businesses that qualify.

Eligibility for SBA government small business loans is often less stringent than bank loan facilities. The terms are competitive, and the rates are generally similar to non-guaranteed loans.

In some instances, your loan may come with counseling and education support, allowing you to get professional financial guidance.

Additional benefits of SBA loans include flexible requirements, subsidized down-payments, and no collateral requirement for some loans.

Crowdfunding

Online platforms like Indiegogo and Kickstarter allow startups to pitch their business ideas and get financial contributions in return.

This pooling of funds from the public can help small businesses access quick financing with few obstacles.

Some businesses use crowdfunding to secure business financing in exchange for shareholding. So, as a contributor, you get to own a part of the business you contributed to.

Make sure you confirm whether the Financial Conduct Authority (FCA) has registered the crowdfunding platform you use.

Convertible Debt

Once you pitch your business to potential investors, they may agree to offer business financing, and in return, the debt will be converted to equity in the future.

This is difficult for many small business owners because it requires you to give up some control of your enterprise to investors.

The benefit of convertible debt is it’s easily accessible and has flexible terms.

Government Grants

If your business is in the science or research field, the government offers grants through the Small Business Administration. The grants are issued through special programs that assess your development objectives.

Note that grants are not just handed out. Your business has to show significant potential for profitability.

Small Business Capital and Why It Is Important

Now that you have an idea of how to get a business loan with no money, you need to know how to put it to good use.

Business Expansion

Most business ventures get to a point where they need to grow. Here are some ways to expand your business after securing small business capital.

Expanding the current business premises or moving to a better facility.

Opening a new location of the business to increase revenue

Adding a new product range to your portfolio

Business growth is expensive; that’s why you have to seek additional funding rather than depending on working capital.

Increasing Brand Visibility

Even the most robust business strategies require new customers. Marketing is essential to build your customer base, enabling your business to reach new milestones.

Close to 50% of small businesses shut down due to reduced market demand. Therefore, you must keep making efforts to increase your brand visibility and reach out to as many people as possible to grow your business.

More Cash for Eventualities

However much planning you do, you’ll always need additional funds for contingencies. Having extra cash means your business won’t grind to a halt if a couple of unexpected expenses arise.

Extra cash on hand gives your business the flexibility for growth without fear of cash flow problems.

Improving Processes

It’s not easy to budget for new equipment or software when you already have many running costs. Using business financing to improve and modernize your business processes is a more viable strategy.

Asset-based lending can also enhance your business practices by enabling you to get more funding.

Purchasing New Inventory

Buying new stock in bulk is always more economical than piece-meal purchases.

Financing assures you of steady product supply to your customers even when your working capital is insufficient to buy new stock. Businesses turning to asset-based financing can easily sustain normal operations when there isn’t any collateral for financing.

Bottom Line

Now you have some tips on how to grow your gym business and secure business financing. Securing small business capital is the key to growth, so don’t get too caught up in daily tasks and forget to build your enterprise.

If the process of seeking small business financing feels overwhelming, you may be interacting with the wrong partners.

The key to small gym business success is to plug into the right networks and get the best rates on financing to grow your small business.

Share your favorite tip to build your business by using #GymBusinessTip on  TwitterFacebookLinkedIn, or Instagram.

Click here for more details or call 214-629-7223 or email jthomas@fmconsulting.net for more information. Or, apply now.

An Outsourced CEO and expert witness, Jim Thomas is the founder and president of Fitness Management USA Inc., a management consulting, turnaround and brokerage firm specializing in the gym and sports industry. With more than 25 years of experience owning, operating and managing clubs of all sizes, Thomas lectures and delivers seminars, webinars and workshops across the globe on the practical skills required to successfully to overcome obscurity, improve sales, build teamwork and market fitness programs and products. Visit his Web site at: www.fmconsulting.net or www.youtube.com/gymconsultant.

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