Club Insider

Club Financing During the COVID-19 Pandemic

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Paul BosleyPaul Bosley

I started working in the fitness industry 46 years ago, and I became the operating partner of my first fitness center at the age of 27. Among the many lessons that my senior partner and mentor taught me, the one that applies to our current situation the most is "Cash is King!" Fast forward 46 years, and I am still an entrepreneur specializing in providing financing to the fitness, franchise and RV and campground industries. Over this time, I have witnessed many changes in the fitness industry. The main equipment manufacturers back then were Universal and Nautilus, and now, they are Life Fitness, Precor and Matrix. The growth in our industry changed from racquetball clubs and big box gyms to franchises and group fitness studios. All businesses must change with the times and have the financial staying power to weather the storms we face. Remember Sears? TWA? Bally Health and Tennis Corporation of America? To be able to make the changes necessary to survive and thrive, the one constant that remains unchanged is that "Cash is King!"

As a result of this pandemic, I believe that offering fitness in a brick and mortar location alone will be more effective if augmented by virtual fitness offerings. As we re-open our clubs nationwide, this article focuses on three key financial options for club business owners to access working capital to navigate the "new normal" operational climate, we will all begin experiencing for the first time.

Equipment Leasing - Financing New Equipment and Sale Lease Backs: Do you need new fitness or non-fitness equipment to set up an audio-visual area in your club to film and support members looking to work out at home? Do you need cash and own your fitness equipment outright?

When financing new fitness equipment, the typical terms require a down payment or a security deposit ranging from one lease payment up to 20% of the dollar amount being financed. With equipment lease backs, you are selling your fitness equipment to a leasing company to access cash. In both cases, the repayment term ranges from 3 - 5 years, and once the lease is paid, the ownership of the equipment is transferred to the company leasing the equipment. The main benefits of equipment leasing are that the transactions are completed quickly and the collateral for the transaction is the equipment package being financed.

Small Business Administration (SBA) 7(a) Loans - Debt Consolidation: When an existing business owner is applying for an SBA loan for debt consolidation, the resulting monthly payment must reduce the total monthly payments of all debt being consolidated by at least 10%. Debt consolidation can include existing mortgages, equipment leases and loans, but credit card debt CANNOT be included. SBA offers loan guarantee reduces the lender's risk which, in turn, makes securing an approval more likely. These loans offer the lowest APR available amortized over a 10-year repayment term. The collateral for this transaction is the business, and if there is a short fall in collateral, the owner(s) personal and/or commercial real estate only up the loan dollar amount.

A couple of years ago, we secured financing for a multi-gym owner to consolidate his mortgages and equipment leases totaling $3.2M, which reduced our client's monthly overhead over $22,000 per month! Our client was a very happy camper and extremely pleased with the outcome!

Unsecured Business Credit Card and Lines of Credit: Our company works closely with an aggregator specializing in unsecured business and personal credit cards and lines of credit. This use of these funds is totally unrestricted, unlike equipment leases and SBA loans. If you want to see if you are prequalified, please visit The credit pull is a soft pull, so it has no impact on your personal credit. If approved, there is no obligation to accept the terms, so there is no downside.

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If you want to learn more about how we can help you with any of these three financing opportunities, please contact Paul Bosley at (800) 788-3884 or For more information, please visit

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