Know the Limits: How Much Line of Credit Can I Get for My Gym Business?

Unless you have excellent cash flow or you’re fortunate enough to have plenty of your own money for your new gym startup, most entrepreneurs wonder, how much can I get on a gym business line of credit? How to determine how much line of credit you can get for your gym business might seem confusing, but you can figure out an estimate with a calculation or with the help of an advisor.

What is a line of credit, and how does it work? Whether it’s a personal credit card or a business line of credit, these are both lenders (either a credit card company or a bank, depending on the type) offering you a set amount of money to spend.

With credit, the institution extends a set amount that you, the borrower, can spend. You must make minimum payments, but you can also pay it off in full instead of being stuck with ongoing installments with credit. You can also use the credit line repeatedly, as long as you make payments and do not spend over your limit.

What is a Gym Business Line of Credit?

A business line of credit is a form of lending from a financial institution like a bank, credit union, or Alternative Lender. These credit forms are not so different from a personal line of credit, which you can continue to reuse or pay whenever you like, within your limit.

Business lines of credit are a version of a small-business loan, yet they offer some flexibility that you won’t find in a traditional business loan. You can also repay or utilize funds multiple times, as long as it remains within your credit limit.

What Types of Companies Benefit?

Companies that have a surprise expense, need to purchase inventory, don’t have a traditional business loan, or could use some aid managing cash flow can benefit from a business line of credit.

What If Your Gym Business Is Considered a Startup?

How much business line of credit can I get for my startup? Many startups don’t have any investors or can only get small traditional business loans. Suppose you need startup funding and don’t have enough cash flow to take you through dips in sales, need a buffer between client payments coming in, or you experience significant seasonal fluctuations. In that case, a gym business line of credit could work for you. The amount you’ll be approved for depends on how long you’ve been in business, your credit score, and your monthly revenue.

What If You Have Bad Credit?

Small companies that cannot obtain a traditional business loan or those only approved for a small business loan because of poor credit can benefit from a credit line. Those who have less-than-ideal credit but also landed a significant client or business deal and need extra resources to help them until their credit score improves can also use a business line of credit. Traditional bank financing can be very difficult to get when you have a bad credit score. Choosing an alternative lender may be your best option. Speak with a Business Financing Advisor to fully understand your options.

Line of Credit vs. Credit Card

You should note that there is a difference between lines of credit vs. credit cards. The line of credit for a gym business can offer you a higher limit because the approval is based on your business as a whole, not just your personal credit score.. These credit lines also come through a lender such as a bank instead of a credit card company.

If you use a business credit card, you may get cash, but it usually comes with a higher APR and fees. Typically credit card penalties, such as late-payment charges, also apply to business credit cards.

Generally, business credit cards are better for those with a newer startup that has yet to establish significant finances. In contrast, a business line of credit is ideal for a company that has operated longer and deals with more substantial and ongoing expenditures.

Line of Credit vs. Small Business Loan

Both a business line of credit and a small business loan are considered bank-issued lending. Although in recent years, Alternative Lenders have closed the gap to also provide financing. However, a loan does not revolve the fund amount like a line of credit. You get the loan, and you repay it over time.

A business line of credit is often a smaller amount than a loan, but the credit is revolving, much like a personal credit card. You can repay it in full or in smaller payments, and you can use the credit again and again, as long as you make the minimum payments and stay within your total limit.

Know the Limits: How Much Gym Funding Can You Have?

If you’re interested in this type of “loan,” one of the first things you’re probably wondering is:

How much line of credit can I get for my business?

A business line of credit does require more revenue and a more established company—even if it’s small—than a business credit card. For a line of credit, you can estimate the general amount you can ask for with a calculation.

Determining the Line of Credit Available

To calculate the estimated amount you may need for a credit line, divide your gross annual revenue by 365, which determines your sales (daily average).

Then total up your accounts receivable and add your inventory days-on-hand. Subtract from that the number of your accounts payable days-on-hand. This number will give your usage of cash.

Multiply your usage (AR days minus accounts payable days). This calculation can provide you with a general estimate of your needed credit.

Keep in mind, your limit, much like a personal line of credit, will depend on a few factors. For business lines of credit, you can expect the lender to consider how long you’ve been operating your company, your monthly revenue, and projected revenue. Occasionally, the lender will also want to know your personal credit history, especially if you are the company’s sole owner.

What are My Options?

How fast can you get a business line of credit? The answer depends on your type of business, revenue stream, credit score, and other factors. We can get you set up with a revolving business line of credit within just a few hours!

When getting a startup up and running, you may have the option of a business line of credit, a small business loan if you’ve already operated for a few years, or even AR financing for specific situations. Line of credit rates also vary, so if you need a more accurate estimate or want to know which lending option would work best for your business, We are standing by to help.

Click here for more details or call 214-629-7223 or email 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: or


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