The best financing option for gyms and health clubs -merchant cash advance

Gymming and taking care of your physical health is a good habit that is increasing in popularity nowadays. To cash in on this popularity there is a spurt of health clubs and fitness centers across the country. But how many of them are able to sustain and become profitable? Maintaining a gym is not an easy task; you have to invest in good quality ventilation system to prevent circulation of stale air full of harmful carbon dioxide which is detrimental to the patrons’ health, all the equipment must be serviced and in good working condition, all gym tools must be disinfected on a regular basis to prevent spread of disease.

If you own a health club or a fitness center then it is your priority to provide a safe environment to your patrons as they pursue their exercise goals. To stay atop competition you must invest in quality maintenance and upkeep of the center. In addition to that, you may want to remodel the gym, introduce more classes, recruit more trainers and maybe include a small eatery too. All this will increase your overheads and you will need a working capital to deal with these expenses.

Traditionally, you might approach a bank for a loan for but nowadays small business financing is a tough game wherein several lenders refuse to loan money without any collateral or any other form of personal guarantee. Acquiring bank loans is even tougher as the sanction process is long and tedious requiring cumbersome documentation. What is the solution?

Alternative funding solutions

With the advent of the internet, there are several online and offline lenders that specialize in unsecured loans. Most of these unsecured loans do not need collateral and are easy to process. The credit limit is usually around $500,000. This limit is reached by analyzing the borrower's credit score, nature of the business, the probability of growth and profit. New businesses can expect anywhere between $25,000 to $100,000. While established centers can expect up to $500K.

What should I do if I have a bad credit?

Not everyone has clean credit scores and hence face difficulties to secure commercial loans. This is where Merchant Cash advance steps into the picture. These are lenders who lend you finance in a very short time not only without any collateral but also if you have a bad credit. There are specialized merchant accounts for gyms, fitness centers, health clubs, golf centers, sports facilities, sports complexes and even recreational complexes with loans designed exclusively for that industry.

What is MCA and why is it the best option?

Merchant cash advance is a system wherein a lender lends money to a borrower in return for a fixed percentage of the future credit card sales. This short-term loan is a very desirable form of small business financing because it is a very simple system where the borrower agrees to pay the full sum unconditionally at some time in the future. The repayment is based on the success and failure of the business; in case a business is successful the MCA gets all its money back but in case a business fails, then the provider cannot claim anything from the borrower.

Unlike a traditional loan where the borrower is burdened with a fixed loan amount which puts a severe strain on the liquid cash, in MCAs you repay a fixed percentage which will vary with the daily income of your gym. And the best part is that you get cash upfront which gives you a working capital to get going – so even as you pay back your loan you can make profits and hope to expand your fitness center.

On what basis is the payback calculated

The total payback amount is calculated based on factor rate. It is calculated only once unlike interest rates which keep changing with the depreciating capital. This rate is calculated by dividing the total financing cost by the loan amount. It is usually a decimal. For example, if you borrow a loan of $50,000 at a factor rate of 1.3 for a period of 12 months then the final payback amount will be 1.3 times $50,000 which is $65,000.

The main purpose of a factor rate is to compensate the lenders for the risk they take by providing you quick cash without any collateral or personal guarantee. This rate is determined by the creditworthiness of your business.

While the overall payment does seem hefty you must not forget that business cash advance saves you precious time which might otherwise be wasted on waiting for a traditional loan from a bank or other lenders.

How can you qualify for a merchant cash advance loan

  • You must be fairly well established to avail loan

  • Your business must accept credit card for all transactions

  • You must provide previous credit transactions and an estimate for future transactions.

What if I need additional funding

Sometimes a situation may arise where the loan from the merchant cash advance may not suffice; there are alternative funding solutions in this scenario which are different from the regular bank loan alternatives. You can look at the the1st position, 2nd position, 3rd position, 4th position and even 5th and 6th position cash advance. These are cash advances which are given at higher interests. These lenders know that they can stake claim should the business fail only after the preceding position has had his share, often this will amount to nothing. You must take this route only and only if all other alternatives are shut.


Running a successful gym or health or fitness center with state-of-art equipment is not easy. Most of the high-end equipment are high maintenance and require immediate attention if they break down. It is at such times that small businesses need working capital to cover the costs of repair and replacement of any spare parts which are often expensive. Or there could be a leak from the air conditioning or the security system might have broken down; the number of problems you can encounter may be various and everything requires finance. High NSFs, bad credit notwithstanding you can avail a cash advance with no collateral whatsoever. Reach out to the nearest MCA provider in your area and plan to expand your fitness center.

"CapVance will  save  our client  money without sacrificing  quality service  that is how  we have a  client for life"-                                                                                                                                                                 Bill O'Donnell, CEO and President