Financing solutions for the fitness market
How to stand your ground on the fitness market
Those wanting to assert themselves on the fitness market not only need good ideas but also the financial means to implement them. There are a wide variety of funding solutions available. Entrepreneurs should therefore study thoroughly which one is best for them and their business.
The fitness market is a tough market to be in: price pressure, high customer turnover rates and cut-throat competition pose serious challenges. This means banks are often cautious, keeping fitness firms at arm’s length when it comes to financing. Companies seeking to become established in this demanding environment therefore need one thing above all else: a suitable financing partner that can offer fair terms while guaranteeing fast, reliable and personal service.
More than just a classic bank loan
Particularly important here is the flexibility of finance options. This is something providers have also understood. Which is why modern loan options have very little in common with classic bank loans. These options are significantly faster to obtain and more flexible than a few years ago and they can often be leveraged entirely online. An SME loan is also available today without any personal guarantee. This means borrowers are entirely free in their entrepreneurial decisions and can perfectly tune the financing to the company. This gives them the option to use their bank guarantees for other financing. Modern financial service providers are increasingly opening up to innovative projects. This is of particular importance in the fitness sector with its powerful trends and novel products – after all, new types of equipment, training concepts and licences are constantly emerging on the fitness market and obsolete financing schemes are proving cumbersome and unsuited to the task.
Property financing for any need
A very popular form of financing in the fitness sector is the financing of movable goods such as leasing, hire-purchase and investment loans for everything from barbells in the gym and the counter in the entrance areas to the sauna in the wellness oasis. These funding formats allow fitness companies with very little of their own liquidity to manage bigger projects and avoid “spikes in spending”. This promotes growth opportunities and can be instrumental to taking your business to the next level in this industry. Leasing and hire-purchase differ in terms of ownership structure. Put in general terms, with the hire-purchase of specific training equipment the company becomes not only the beneficial owner but also legal proprietor of the equipment pool. The equipment becomes part of their fixed assets and is correspondingly disclosed in the balance sheet. After the last instalment is paid, the financial service provider loses his retention of title and the equipment can be used without any further payments, negotiations or extension of any contracts. If the equipment is leased this is not the case. Instead the leased objects can be returned after the contract has expired meaning lessees can always have state-of-the-art equipment at their disposal. Also important when selecting the right financing option is to never lose sight of your own situation and any possible changes over time. After all, companies in the fitness sector are enormously varied in terms of size, focus and scaling potential. A recently opened personal training studio has completely different financing needs to a nationwide chain with dozens if not hundreds of clubs.
Financing must be tailor-made
Especially smaller outfits in the fitness sector have to keep an eye on reaching the break-even point as their main challenge. Balancing costs against revenue over the year is far more difficult for them than bigger chains that enjoy economies of scale due to a larger customerbase and locational advantages. This shows that financing should be handled individually. Financial solutions have to fit the company and its degree of maturity so that they exploit the full potential of effective financing. To make this happen we recommend you compare as many providers as possible to get a broad overview of the various financing models and their terms and conditions. Should you lack the expertise or time to do so in-house, you can also entrust this task to external providers. Alternatively, you can also compare financing options using online platforms and make direct contact with suitable providers. Regardless of how you find your perfect financing option, at the end of the day a reliable financing partner is a valuable asset enabling you to also enjoy future success on the keenly contested fitness market.