Is it time to upgrade your commercial gym equipment? Finance and lease options help you afford the latest treadmills, ellipticals and weight machines on a small business budget.

Learn about the costs associated with loans and leases, along with how to make the best gym equipment finance decision.

Gym Equipment Finance: Rent or Buy?

Commercial gym equipment finance options exist for small business owners with bad credit and limited capital. But your lender and lessor choices may vary according to your needs and financial status. Also keep in mind your total cost depends on factors such as your business credit score, equipment value and term length.

Review the pros and cons of a gym equipment lease vs. a loan, then determine which commercial gym finance option is the best fit for your company.

Gym Equipment Leasing vs. Buying: Pros and Cons

Many fitness center owners may not have the cash to buy expensive machines outright. A loan for gym equipment typically is the best option. Why? Once you pay off the loan, you have an asset.

If you frequently update your machines or need gym equipment financing for bad credit, leasing might be the better choice.

Loans for Gym Equipment

For those with good credit, securing an equipment loan isn’t difficult. That said, equipment loans for bad credit exist, too. Expect stricter terms and higher rates.

Many gym equipment loans are secured loans — meaning the machine acts as collateral so you can finance the majority of the expense.

Pros of equipment loans include:

  • If you pay off your loan early then, you’ll save on interest costs
  • Owning an asset allows you to sell or dispose of it when you want
  • Loans are great for durable equipment that will last a long time

Note there may be disadvantages to gym equipment loans. For instance:

  • Business owners with bad credit will pay higher interest rates for gym equipment financing
  • Loans don’t cover the cost of shipping your gym equipment
  • You’re responsible for machine repair and maintenance

Leasing Options for Gym Equipment

You might wonder, “How much it costs to lease gym equipment?” The answer varies according to several factors, including the value of the machines and the length of the lease.

With that in mind, leasing comes with specific advantages, including:

  • More flexibility to update gym equipment as your needs change
  • May lower your tax bill when used as an operating expense
  • Some lessors offer maintenance plans and cover shipping costs

Cons of leasing commercial gym equipment include:

  • You pay for a new machine without gaining an asset at the end of the lease
  • If you purchase the equipment after the contract ends, it may cost you more than a loan

How much it costs to lease gym equipment? The answer varies according to several factors.

Types of Commercial Gym Equipment Finance

Once you’ve considered the pros and cons of gym equipment finance, consider:

  • Types of machines you want to rent or buy
  • Resale value and lifecycle of the equipment
  • Amount of capital you have for a down payment
  • The size of your monthly budget
  • Current credit score and financial strength

Loans for Gym Equipment

Small business owners often choose a term loan to cover the cost of new equipment. Conventional lenders, such as a bank or a community lender, provide favorable rates and various loan lengths. However, gym equipment financing for bad credit requires you to think a bit outside of the box.

Alternative lending options offer loans for those with less-than-perfect financials. Also, equipment manufacturers and resellers provide in-house commercial gym equipment finance programs.

Term Loans – With a term loan, you’ll pay for a predetermined length of time at a set interest rate. Term loans typically are lower in cost but require a down payment. 

Equipment Finance Loans – Lenders who provide equipment financing may not require a down payment. The company reserves the right to repossess the equipment if you fail to pay. 

SBA Loans – Small Business Association (SBA) loans help small business owners upgrade gym equipment and offer interest rates comparable to conventional lenders. But you may need to fill out more paperwork. 

In-House Loan Programs – When you buy gym equipment, then the manufacturer or reseller may offer to finance through their company or a partner program. You’ll pay a higher interest rate, but these companies often provide gym equipment financing for bad credit. 

Gym Equipment Loans: What Are the Costs?

With all types of financing, you’ll pay various expenses. The actual amount may differ according to your creditworthiness, available capital and the overall total of the loan. 

Typical loan costs include: 

  • Interest – Your annual percentage rate (APR) varies by lender and credit score. The higher the loan rate, then the more you’ll pay over the life of the loan. 
  • Origination Fee – Many lenders charge you a one-time payment to create the loan. This fee may be a percentage of your gym equipment cost or a flat fee. 
  • Down Payment – While some loans cover the full cost of the equipment, others require you to pay a portion of the loan amount upfront. The percentage varies by lender, but it’s possible to find a commercial gym equipment loan with no money down as well. 
  • Shipping – Most finance companies don’t cover your shipping fees, so you’ll need to come up with extra funds to cover this amount.

While you don’t pay monthly interest to lease gym equipment, there are other expenses.

Leasing Options for Gym Equipment

Leasing options for gym equipment span an array of terms and companies. When leasing, the person or company you rent from is called the lessor. A lessor can be the company who manufactures the machine or a third-party lender. 

  • Captive Lessor – A company that manufactures, sells and rents gym equipment is a captive lessor. Typically, these companies work well with business owners who have less-than-great credit. 
  • Individual Lessor – This is a third-party company that may partner with the equipment manufacturer or specializes in equipment loans. 

Gym equipment leases also can be capital leases or operating leases. Capital leases resemble rent-to-own agreements and help you purchase gym equipment. With an operating lease, you rent the machine for a short time and return it once the contract is up. Both forms have tax implications, so it’s vital to understand which type your lessor uses.

How Much Does It Cost to Lease Gym Equipment?

While you don’t pay monthly interest to lease gym equipment, there are other expenses. The actual amounts vary by the lessor, so it’s essential to review the fine print before purchasing a new machine. 

Administration Fee – Commercial gym equipment costs of leasing often include a one-time or monthly fee. This charge covers the cost of maintaining your account. Depending on the lender, it may be a flat fee or a percentage of your total cost. 

Down Payment – Some lessors require you to put money down to guarantee your payments. In some cases, this amount could equal your first and last payment. 

Residual Amount – If you decide to purchase your equipment at the end of the lease, then this is the amount that you’ll pay. For capital leases, this number is relatively low as your contract is similar to a rent-to-own situation. However, with operating leases, you’ll pay the fair market value of the machine. 

Other Expenses – You may choose to add-on extras such as insurance or a maintenance program. These monthly charges vary by company. 

Other Gym Equipment Finance Options

If the gym equipment finance options listed above don’t fit your needs, then consider alternative business loans like merchant cash advances and business lines of credit. Both types of financing help you buy fitness equipment and other business supplies.

Personal loans and credit cards may provide small business owners with additional credit to finance gym equipment purchases. But it’s best only to use personal loans or credit cards if you are unable to get a business loan and don’t qualify for a commercial fitness equipment lease.

Final Thoughts on Gym Equipment Financing

Once you’ve reviewed your finance options for gym equipment, it’s time to apply. Pull out your financial documents and use them to complete the lease or loan application.

If you’re applying for a conventional bank loan or an SBA loan, then you’ll need to write a loan request letter.  Submit your information and wait for a financial manager to review your data.

Gym equipment finance companies provide a fast turnaround time, so you can buy your new machines shortly after receiving funding. With new fitness equipment ordered, now it’s time to clean out your space and get ready to delight fitness gurus with your updated machines.

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