[dropcap_green]W[/dropcap_green]hether you are establishing a new facility, or in need of funds to maintain or upgrade your current equipment, the cost of doing so can be a big burden on your cash flow.
“Opening a new business is a stressful time and having this funding option to limit our risk meant we could focus our money and efforts on growing our business.”
There are typically three options for fitness businesses looking for a cash injection:
1. Finance Companies Who Specialise In Servicing The Fitness Industry.
2. Fitness equipment suppliers.
3. Traditional Financial Institutions (e.g., banks).
Finance Companies Who Specialise In Servicing The Fitness Industry.
GoGetta Equipment Funding (www.gogetta.com.au) funds commercial fitness equipment for both new and existing gyms, as well as for personal training studios.
GoGetta has been helping businesses to fund their commercial equipment needs for over two decades, through the Rent.Grow.Own® rental solution model.
The GoGetta Rent.Grow.Own® Solution is unique to the marketplace and is perfect for businesses who want to keep their options open. With no long term liabilities and fixed regular payments, they offer a 12-month rental agreement, so that your business has the flexibility to:
• Purchase the commercial equipment at any time during the first 12 months and receive a 75% net rental rebate.
• Return the equipment at the end of the 12-month agreement if it is no longer needed.
• Continue to rent (and continue to reduce the final purchase price).
The benefits of renting your equipment include:
• It frees up your working capital
• Low, weekly and consistent payment amounts
• You can try before you commit to buying
• Minimal paperwork.
Rent is an ‘off-balance’ sheet item (like salaries or electricity), which means that equipment rental contracts have no impact on your equity, or on your ability to borrow.
Adam Westwick runs a private three-site studio chain in Queensland called Exclusively You (www.exclusivelyou.com.au). He received funding through GoGetta to kit out his studio. ‘As a small business, finding funding can be quite hard but GoGetta provided us with a flexible solution that allowed us to keep hold of our capital. Opening a new business is a stressful time and having this funding option to limit our risk meant we could focus our money and efforts on growing our business.’
Visit the website www.gogetta.com.au for more information. You can even try out the GoGetta rental calculator to see what your payments might look like.
Commercial Finance (www.cfcorp.com.au) is another example of an industry-specific finance company. The key benefit of working with Commercial Finance is that it gives you the option to choose from any equipment supplier that you prefer. This is especially helpful if, for example, there is one brand of treadmill you want, a different bike brand and a separate rower brand; you might even use some of the borrowed funds to purchase a bigger car to accommodate all the necessary equipment for your outdoor sessions.
When you choose a finance company like Commercial Finance you are gaining the benefits of years of industry knowledge and financial relationships. In fact, Commercial Finance will even help you collate your figures so they are ready to present to a financial institution (on your behalf). They can even help select which institution is most likely to approve your application. On average, approval through Commercial Finance takes one to five days, so you aren’t left waiting for too long to find out if you have been successful.
Fitness Equipment Suppliers.
Life Fitness Australia is one distributor who offers finance for purchases of their own products. They currently work with numerous health clubs and facilities such as Anytime Fitness and YMCA, as well as personal training studios, hotels, resorts, schools, universities and the Defence Force.
With 15 years of experience in the industry and over 300 different types of gym equipment available, Life Fitness Australia is a one-stop source for fitness solutions, including extensive pre and post-sales support and service.
“Of course, it’s not just the equipment itself that is important when choosing which brand to integrate into your business; you want to ensure that the company offers prompt service should anything go wrong.”
Their range includes new and pre-owned cardio equipment such as treadmills, bikes and cross trainers, as well as strength equipment and free weights in both the Life Fitness and Hammer Strength ranges. Again you have the flexible options of outright purchase, operating lease/rental or lease purchase.
Of course, it’s not just the equipment itself that is important when choosing which brand to integrate into your business; you want to ensure that the company offers prompt service should anything go wrong. Paul McClure, Managing Director of Life Fitness Australia, says ‘In Australia, we have the largest commercial marketshare and infrastructure, which means we can employ the service and installation teams required to service our customers equipment and needs.’
Life Fitness Australia has a turnaround time from one week for standard orders, to up to 14 weeks for special orders. Head to their website for a quote www.lifefitness.com.au or visit a showroom in Mulgrave (Vic), Chatswood (NSW), Geebung (QLD) or Bassendean (WA).
Other equipment brands who offer finance on their own equipment include:
• Technogym (www.technogym.com/au)
• Precor (www.precor.com)
• Matrix (au.matrixfitness.com)
• Summit Fitness Equipment (www.summitfit.com.au).
Traditional Financial Institutions.
Tanya Weeks is the Owner of Vicious Cycle (www.viciouscycle.com.au), an indoor cycling studio at Bondi Beach (Sydney). After moving to Bondi three years ago, Tanya decided she no longer wanted to attend a big gym where she wasn’t making use of all the facilities. She looked online for a standalone indoor cycling studio but couldn’t find one; but not only that, Tanya discovered a community of people online who were looking for the same thing.
‘l found standalone cycle studios all over the US, and considering there is yoga, Pilates and PT studios l couldn’t understand why no one here had developed a model for an indoor cycling studio.’ And so Vicious Cycle was born.
Once Tanya decided she was going to proceed with her vision, it was a 10-month process until the doors opened. Now, offering 20 classes a week, servicing more than 200 participants, Tanya couldn’t be happier.
The finance side of things did take some research. Tanya explains, ‘l had my own funding but l needed more, so l looked at leasing equipment but the equipment available for leasing was not what l wanted for the studio. So, when l found the bikes l did want, l went to a bank. I had a solid business plan and that helped me with my application’. Tanya successfully secured a commercial lease for her Body Bikes.
Tanya’s advice to anyone looking to finance their own venture is: ‘Don’t underestimate how much capital you need for the first year. It’s difficult to predict the way the first 12 months will run, so plan for anything, and make sure you have enough capital to support you through it.’