Small Business Loans for Gyms

Over the course of the 2010s, the general public became significantly more health-conscious. As early as 2011, reports showed that an overwhelming majority of American adults prioritize health in their grocery store purchases – and as any health expert knows, diet goes hand in hand with exercise. Most people know this too: A recent study found that, as the 2010s closed, roughly two-thirds of Americans regularly “engage in fitness-related activities.”

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However, as you surely know as a fitness professional, 2020 changed the gym world’s sunny outlook. Due to the COVID-19 pandemic, many state and local governments have placed capacity limits on gyms, kept them from operating at all, or gym members were wary of exercising indoors with people whom they do not know. Although Americans continue to prioritize their health, COVID-19 restrictions have caused many Americans to turn to home exercise, and as a result, the gym, health, and fitness industry contracted 0.5% between 2015 and 2020.

These changes might be affecting your gym’s bottom line. If this is the case, then small business loans for gyms can help. Read on to learn all about your low-cost funding options.

Financing Options for Established Gyms During the COVID-19 Coronavirus Pandemic

In March 2020, Congress and the White House enacted the CARES Act and thereby founded the Paycheck Protection Program (PPP). Created in response to the then-new COVID-19 pandemic, this Small Business Administration (SBA) loan program expands funding access for gyms and other small businesses.

After the first round of PPP applications ended in August 2020, the December 2020 passage of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act paved the way for a new January 2021 application round. Businesses approved in this new funding round can use their proceeds for additional needs beyond the payroll costs that comprised the first round’s focus.

To learn more about how you can apply for and use PPP loans, please check our related articles listed below:

For regular updates on loan opportunities and forgiveness please check SmartBiz Loans COVID-19 information center.

Applying for a first or second PPP loan in 2021

The SmartBiz streamlined PPP Loan application can help you fill out your application, upload required documents, and submit them to the bank quickly.**

SmartBiz can help you apply for these funds. We have specialized in SBA loans since 2013 and our network of banks has funded nearly $4 billion in SBA, PPP, and bank term loans.

Whether this is your first or second PPP loan, SmartBiz can help! Businesses with less than 500 employees that are negatively impacted by the pandemic can apply for their first PPP loan.

The program expires on May 31, 2021. No applications will be accepted after that date. Keep an eye on the SmartBiz Small Business Blog for updated information about an extension if approved by congress.

Funding challenges and opportunities for gyms

The biggest funding challenge currently facing gyms is the impact of the COVID-19 pandemic. As mentioned earlier, gyms have been subject to especially strong public health restrictions during the pandemic, and these restrictions can substantially decrease gyms’ revenue. Compounding this concern is that lenders often balk at funding companies in struggling sectors, so low revenue can in and of itself make obtaining additional funding tough.

Gym funding, despite some concerns, isn’t all doom and gloom – some might even argue that the industry has an exciting future. A recent report explored the prospect of gyms pivoting to virtual training sessions that bring in revenue via class fees and, in some models, monthly membership fees. Another report predicted a 28% growth rate for virtual gym classes. Lenders familiar with these prospects may thus feel inclined to approve funding for gym owners investing in virtual training.

To find out for yourself whether your gym will face more funding challenges or opportunities, you can pursue small business loans for gyms. Below are some examples of your funding options.

Funding options for gyms

To obtain small business loans for gyms, consider government funding such as SBA loans or non-government funding such as bank term loans. No two loans are quite the same, but the below details outline the basics of several important loan types.

The SBA 7(a) loan program

Many finance experts view low-cost SBA 7(a) loans as the best small business funding type given their low monthly payments, long terms, and low rates. You can use SBA 7(a) loans for the following purposes:

  • Working Capital Working capital is often the strongest indicator of your gym’s financial wellbeing. To calculate your working capital, subtract your current liabilities from your current assets or determine the total amount of cash you have on hand. If you find negative working capital, you should grow your assets. You can use SBA 7(a) loans to do so through new employee hires and new equipment purchases.
  • Debt Consolidation – SBA 7(a) debt consolidation loans allow borrowers to refinance their company’s loans. If you take out an SBA 7(a) debt consolidation loan, you can use it to refinance daily or weekly payment loans, short-term business loans, merchant cash advances, and high-interest business loans.
  • Commercial Real Estate – SBA 7(a) loans can go toward owner-occupied commercial real purchases, thereby facilitating the opening of a second gym location. Alternatively, your loan can go toward refinancing your current commercial real estate mortgages.

Advantages of SBA 7(a) loans for gyms

Experts consider SBA 7(a) loans the “gold standard” for small business funding due to their:

  • 10-year terms (25 years for commercial real estate loans)
  • Wide use of funds
  • Lack of prepayment penalties
  • Low rates
  • Affordable monthly payments
  • Availability in all 50 states

Requirements for gyms to apply for SBA 7(a) loans

You and your gym must check all the below boxes to apply for SBA 7(a) loans:

  • Your gym must be based in the U.S.
  • You must have a personal credit score above or equal to 650
  • Your gym must have no recent settlements, outstanding charge-offs, or tax liens
  • You must be a U.S. citizen or lawful permanent resident
  • Your gym must be at least two years old
  • You must be at least 21 years old
  • You must not have foreclosures or bankruptcies in the last three years
  • You and your gym must be on-schedule with all government-related loan repayments

Some lenders may have additional requirements such as business plan presentations that others lack – SmartBiz Loans included.


How to apply for an SBA 7(a) loan for gyms

Step 1: Verify that you and your gym meet the above SBA 7(a) loan requirements – if not, other funding options explained later may be more suitable. Learn more via the SmartBiz Loans guide to SBA Loan Requirements for Existing Businesses.

To discover how your business financials stack up for funding, use our easy-to-use online tool. SmartBiz Advisor™ helps you track the financial health of your business and learn how banks typically evaluate your business.* SmartBiz Advisor also recommends ways to help you improve your credit and strengthen the financial health of your business as needed. Read feedback from real SmartBiz Advisor users and sign up here.*

Step 2: Once you’ve confirmed that you qualify, gather your required paperwork. Asking your bookkeeper, accountant, or another financial expert for help may make this step easier. To learn more, visit the SmartBiz Loans Guide to SBA Loans.

Step 3:  Choose a lender. Keep the following in mind as you do so:


A trustworthy lender should assign you a representative who has taken the time to learn all about your application, your gym, and the gym industry. You should have no trouble regularly reaching this representative via email or phone.


Find your lender on Google, Consumer Affairs, and TrustPilot to read their reviews. Double-check that you’re looking at feedback from actual customers, and try to find other gym owners among the reviewers, as their experiences may closely resemble yours.


Your loan will likely include interest fees and repayment fees. It should have very few if any, other fees. A large number of extra fees is a sign to consider a different lender. Additionally, you should only agree to fees due during your loan’s lifetime and before your loan’s funding.

Obvious loan terms

Your loan’s fine print should answer most of your questions. If it doesn’t, your loan costs and payment schedules could ultimately prove more challenging for you and your gym. To gain a full understanding of your loan’s fine print, get details from your lender about your potential collateral requirements, payment frequency and amounts, prepayment penalties, and total loan amounts. Vague, unhelpful answers are a sign to search for a different lender.


Your loan’s clear terms should also include a clearly stated, straightforward interest rate and APR. Otherwise, you might ultimately discover that your lender does not intend to detail other important loan provisions, thus introducing additional unnecessary funding challenges.

The SBA 504 loan program

Small businesses, including gyms can apply for the SBA 504 loan program if they need funding for modernization or expansion work. You can use any SBA 504 loans you receive to open new locations, hire new employees, or upgrade your equipment.

SBA 504 loans can drastically reduce your costs if your gym falls within the public policy goals of your local community development corporation (CDC). In this case, your SBA 504 loan can cover up to 50% of your project costs and your CDC can cover up to 40%. As such, your immediate out-of-pocket costs might be as low as 10%.

The SBA microloan program

If your gym is a very small business (a.k.a. microbusiness) under the SBA’s definition, you may qualify for the SBA Microloan Program. Through this program, you can obtain SBA microloans of up to $50,000. Your microloan proceeds can go toward all business costs other than commercial real estate purchases and debt payments.

Non-SBA loans and other funding options

Although SBA loans are ideal for small businesses, other options exist if your gym does not qualify. These options often have higher rates, shorter terms, and larger payments than SBA loans. They include:

Bank term loans

Bank term loans often give businesses funding access as quickly as do SBA loans, thus making them a fair alternative if you do not qualify for SBA loans. Bank term loans, like SBA loans, are valid for working capital and debt refinancing, but their amounts and repayment terms may be less favorable, and their rates and prepayment penalties may be higher.

Business lines of credit

Business lines of credit are revolving credit lines with a maximum proportional to your credit score though usually lower than that of a bank term loan. Business credit lines also differ from bank term loans in that they do not mandate full use of your funds. If anything, not using your entire business credit line may save you money since you’ll only pay interest on the credit line funds you actually borrow.

You can access your business line of credit as often as you need until its funding runs out, and you likely won’t have to put up collateral to obtain it either. Learn more about business lines of credit via the SmartBiz Loans blog Small Business Lines of Credit Pros and Cons.

Business lines of credit strongly resemble business credit cards, but with two major differences. The first is that you cannot reuse business credit lines after you max them out. The second is that business credit lines do not have spending rewards. Read more via the SmartBiz Loans blog Finding the Right Credit Card for Your Small Business.

Merchant cash advances

If your gym accepts card payments, you may qualify for a merchant cash advance (MCA), which is a loan issued by a card provider. To repay an MCA, you can either funnel a small portion of all your card transactions to your lender or set up a traditional installment-based plan.

MCAs, while convenient to repay, may come with a catch – namely, extremely high APRs. Learn more via the SmartBiz Loans blog What You Need to Know About an MCA.

Why Choose SmartBiz Loans?

Need funding to rebuild your business? Don’t waste time going from bank-to-bank filling out multiple applications. SmartBiz helps you find the best financing for your unique needs whether that’s an SBA loan, Bank Term loan, or other financing.  About 90% of qualified applications we refer to banks are funded and our financial professionals are on hand to answer your questions. Discover if you’re pre-qualified here without impacting your credit scores** and read the SmartBiz 5-star customer service reviews on TrustPilot.

 *The information provided through SmartBiz Advisor, including the Loan Ready Score, is for educational purposes only. SmartBiz Advisor is not a financial or legal advisor as defined under federal or state law. Use of this information is not a replacement for personal, professional advice or assistance regarding your finances or credit history.

**We conduct a soft credit pull that will not affect your credit score. However, in processing your loan application, the lenders with whom we work will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and happens after your application is in the funding process and matched with a lender who is likely to fund your loan.

 What you need to know: The information provided through SmartBiz® University and the articles contained therein are for educational purposes only. Use of this information is not a replacement for personal, professional advice or assistance regarding your finances or credit history.