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Financing for gyms and studios

Memberships are the best kind of revenue a lender can read: same day, same amount, every month. The equipment is the expensive part.

How the money reads

An underwriter reads six months of statements. This is what yours usually says.

  • Recurring billing makes the account unusually even, month to month.
  • January is the peak and the summer is the trough, every year.
  • Churn shows up as a slow drift rather than as a bad month.
A month, roughlyTiming only — no amounts
Membership billingLease, staff and equipment

Recurring billing is the most readable revenue there is: same day, same amount, every month. The costs sit flat underneath it, so what a lender is really reading is the trend of the top line.

The thing that slows these files down

Prepaid annual memberships arrive as one large deposit and then nothing. Flag them, or they read as a one-off rather than a year you have already earned.

Pensive professional instructor supporting concentrated plump African American woman in training with gym equipment

What it usually pays for

  • Racks, machines, flooring, mirrors
  • A build-out, or a bigger unit
  • Covering the quiet months before January

What an underwriter asks

The same four things decide every file: revenue and how long you have been making it, the cash cushion, bounced payments, and what you already pay other lenders. Here is what those look like in this trade.

How much of the revenue is recurring?
Membership billing is the most readable revenue there is: same day, same amount, every month. The share of the account that recurs is the strongest thing a fitness file has.
Are there prepaid annual memberships?
A year paid up front arrives as one large deposit and then nothing. Flag it, or it reads as a one-off rather than as twelve months you have already earned.
What is the equipment already costing?
Racks and machines are usually financed already, and what is still owed on them decides the room left for the next thing.
Six months of statements, read
  1. 1Revenue, and how longThe monthly average, and the years behind it
  2. 2The cash cushionAverage daily balance, against a month of revenue
  3. 3Bounced paymentsNSF and returned items over ninety days
4
What you already pay lenders

Totalled against monthly revenue and capped at 20% — the ceiling we pre-qualify to. This is the one that binds: two advances already running leaves less room than none, however good the rest looks.

already committedroom left
020% of monthly revenue

The split shown is an example, not your file. Yours is read by a person, from your own statements.

The whole method, on one page →

Asking for the right amount

Equipment is a quote. A January bridge is a number of months — say which months and why, because "covering the summer" is a use of funds an underwriter can price and "working capital" is not.

Across every trade the anchor is the same: roughly a month of revenue, and never more than the statements support. What you already pay other lenders matters as much as what you are asking for, and you need an average of at least $20,000 a month to qualify at all.

When to ask

January is the peak and it is the wrong time to be arranging money. Equipment for January is a September or October decision; a bridge through the summer is a spring one.

Have these ready as well

On top of the standard file — six months of statements, your incorporation documents, your CRA business number and photo ID.

  • The lease, especially for a build-out or a larger unit
  • Quotes for equipment and flooring
  • A membership report showing active members and monthly billing, if you have one
  • Insurance certificates for the premises and the instruction
The standard file, in detail →What your province calls its incorporation papers →

What usually fits

In this order, more often than not — though the file decides, not the trade.

Equipment financing

The oven, the van, the line. Financed against the thing itself, so the payment sits against what the thing earns.

$10,000 – $1,000,000

Term loans

A fixed amount, a fixed schedule, and nothing pledged against it. The straightest answer when you know the number and the timeline.

$5,000 – $2,000,000

Revenue-based line of credit

Draw what you need, pay for what you draw, and the limit moves with your revenue. For months that are uneven, not short.

Up to $500,000

See what you qualify forAbout ten minutes · no hard credit pull

Where these files get harder

None of these is an automatic no. They are the things that turn a one-day decision into a conversation, and all of them are better said by you than found by an underwriter.

  • Founding-member rates that have never been repriced
  • Revenue that is mostly drop-ins and class packs rather than recurring billing
  • Churn that has been running long enough to show as a downward drift
The funding step of a Spark application: an amount entered, and a one-line box saying what the money is for.

Any of these is one sentence in the box that asks what the money is for.

Said on the way in it costs you nothing. Found in the statements by somebody who then has to ask, it costs a day.

Questions

No. It happens every year in this trade and it is read as the shape of the business. A summer trough with a January peak is a pattern, not a warning.

Still deciding? Talk to a specialist — no application required.

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Other trades

See what you qualify for.

About ten minutes, most of it finding your statements. Applying never touches your credit score.

Takes about ten minutes, and applying never touches your credit score.