8 Options to Finance Your Fitness Franchise

Franchises like Tapout Fitness are a top-ranking, solid business opportunity, and the fitness industry generates roughly $20 billion a year in the United States, but financing gym startup costs can still prove challenging. Assessing your personal financial situation is a logical first step in your search for funding options. You can do this by completing a financial statement like the one available through the Small Business Administration (SBA) website. This tool can help you judge the amount of funds you have available plus assets and other resources you can access easily or use as collateral for a loan. Once you’ve taken a good look at your finances, you can begin evaluating different funding sources. gym startup costs

Funding Options for Gym Startup Costs

There are a number of potential ways to fund a fitness franchise, and it can take some time and effort to find the best option for your situation. Here are some financing methods worth exploring.

Liquid Assets

If you’ve recently sold a business or have assets that can be liquidated easily, you may have the cash needed to invest in a fitness franchise and start out debt-free. If your long-term goal is to buy multiple units or become an area developer, it’s wise to set aside enough cash for growth and expansion.

Franchisor Financing

Many franchisors offer in-house financing options or can connect you with lenders who are familiar with their business model and/or have given loans to other franchisees. If you’re investing in a Tapout Fitness franchise, talk to us about financing to see if we can help.

Conventional Loans

Traditional lenders like credit unions and banks typically favor business owners with a proven track record and usually want collateral to lower their risk on a loan. If you have an existing gym that you’re converting to join a franchise system like Tapout Fitness, a conventional loan from a lender with whom you’ve worked previously can be a viable option.

SBA Loans

If a fitness franchise is your first foray into business ownership, you may have an easier time getting financing through one of the SBA loan programs. Consider getting help from a CPA or other financial professional when you’re completing the application because the process can be complicated and lengthy and must be done through an SBA-approved lender.

Retirement Accounts

If you have a self-directed IRA or 401K and meet certain requirements, you may be able to use these funds toward your gym startup costs. If this is a route you’re considering, you’ll need to get professional advice to ensure that you follow the correct process.

Equipment Leasing

Your franchisor is the best source of advice on whether leasing is an option for the gym and/or office equipment you’ll need for your fitness franchise. If it is, you’ll probably be directed to a specific leasing company that can give you more details about terms and interest rates.

Home Equity

Applying for a home equity line of credit (HELOC) or a second mortgage may be a practical choice if you have sufficient equity built up in your personal residence.

Online Financing Portals

These online services match future franchise owners with lenders, usually for a fee. Using an online portal may give you exposure to loan sources you wouldn’t access otherwise because multiple lenders can review your completed application.

A Combination of Sources

After you explore the franchise financing methods that match your particular situation and risk tolerance, you may decide that it’s more feasible to use several of the above sources. To learn more about financing the gym startup costs for a Tapout Fitness franchise, contact us today! Tapout_728x90_2

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