Quick answer
Gyms and fitness studios usually borrow for equipment such as reformers, racks and cardio machines, for fit-outs of warehouse or retail units, for franchise fees, and for opening extra sites. Equipment finance suits gear, term loans or property-secured loans suit fit-outs and new locations, and franchise finance suits branded gyms. Lenders like recurring direct debit income but look hard at member churn, prepaid memberships, lease length and cancellation rules.
Key points
- Direct debit memberships give lenders predictable income, but they want to see churn, not just headline member numbers
- Gym equipment holds resale value better than most fit-out costs, so it is usually the easiest part of a gym to finance
- In WA, a mandatory fitness industry code lets members cancel by email and caps fixed-term contracts at 12 months, which affects how lenders view future income
- Most gyms see a January sign-up surge and a winter slump, and repayments need to work in the slow months
Every gym owner knows the number on the dashboard: active members. Lenders know it too, but it’s rarely the number they care about most. What they want is how many members leave each month, how quickly you replace them, and how much of the money in your account has already been spent by members who prepaid for the year.
Get those numbers ready and a fitness business can be an attractive borrower. Direct debits arriving every week or fortnight are about as close to predictable income as a small business gets.
What kind of fitness business are you, in a lender’s eyes?
The sector covers very different models, and the finance tends to follow the model.
| Type | Typical funding need | What lenders focus on |
|---|---|---|
| 24-hour or budget gym | Large floor space, lots of cardio and strength equipment, access control | Member numbers, churn, lease length, franchise terms |
| Boutique studio (reformer Pilates, cycle, HIIT, yoga) | Specialist equipment such as reformer beds or bikes, a premium fit-out | Class utilisation, pack and membership mix, owner’s experience |
| Strength, CrossFit-style and functional gyms | Racks, rigs, plates, flooring, often in an industrial unit | Community retention, coach depth, council approvals for the site |
| Franchise studio | Franchise fee, mandated fit-out and equipment package | The brand’s track record, territory, your own capacity |
| Multi-purpose health club | Pool, courts, crèche, café | Property value, scale, management |
Boutique studios have been one of the fastest-moving parts of the industry, with operators adding Pilates, recovery and wellness services to lift spend per member. Lenders are generally comfortable with the model but will want to see that classes fill, not just that the timetable is full.
What do gyms usually borrow for?
Equipment. Treadmills, bikes, rowers, racks, cable machines, dumbbells, reformers and recovery gear. Because quality fitness equipment has a real second-hand market, equipment finance is usually the easiest approval in the whole business. Our equipment finance calculator can help you compare terms, and our leasing vs buying comparison explains the trade-offs, including when an operating lease suits gear you’ll replace in a few years.
Fit-outs. Rubber flooring, change rooms and showers, air conditioning, sound and lighting, mirrors, reception. Fit-out costs are harder to finance than equipment because so much of the spend ends up as plumbing, walls and wiring nobody can repossess. Term loans, an unsecured loan for smaller studios, or property-secured finance for larger projects are the usual answers.
Franchise entry. Franchise fees, territory costs and the mandated equipment package. See franchise finance.
New sites. A second studio, or buying out another operator’s members and lease.
Equipment refreshes. Members notice tired cardio machines. Many owners plan a rolling replacement cycle and finance it in stages.
Planning a new site or a fresh floor of equipment? Tell us about the project; one of our people will ring you, and asking costs you nothing on your credit file.
Why do cancellation rules matter to your loan?
A lender valuing your future income needs to know how firmly members are tied in, and state and federal rules play a part in that.
In Western Australia, fitness providers must follow a mandatory Fitness Industry Code of Practice. Under it, members can cancel by email, without visiting in person or filling out a special form. Providers have seven days to confirm in writing, and the membership ends within 30 days of notice. Fixed-term agreements can’t run longer than 12 months, and new members get a seven-day cooling-off period. Members who provide a medical certificate can cancel immediately.
Elsewhere, consumer law already limits exit fees that don’t reflect a genuine cost, and the federal government has flagged changes aimed at subscriptions that are hard to cancel. Industry groups have argued these could shorten member commitments for physical gyms.
What this means for borrowing: lenders are increasingly reluctant to treat locked-in contracts as guaranteed income. They lean more on your actual retention history. A gym with members who stay because they like it borrows more easily than one that relies on being hard to leave.
What are the industry-specific risks?
Churn. Industry experience suggests many new members drop off within months. Track your monthly cancellations and average membership length, and have them ready.
Prepaid memberships. Selling annual memberships upfront brings in a pleasant lump of cash, but you’ve still got to deliver the service. A lender reading your statements may discount that money.
Seasonality. January is the peak for sign-ups, with a second wave around autumn for many gyms. Winter and the run-up to Christmas are usually quieter. Our page on loans for seasonal businesses covers how lenders handle this.
The lease. A gym fit-out can be expensive to walk away from. Lenders want a lease that comfortably outlasts the loan, and for warehouse sites, the right council approvals for a gym use.
Wages and contractors. Many gyms use contractor trainers and instructors. Make sure those arrangements are sound, because a lender or buyer may ask.
Documents that help a fitness business
- A full year of business account statements, long enough to show January and the winter dip
- Membership software reports: active members, monthly joins and cancellations, average tenure
- Breakdown of income by membership type, class packs and casual visits
- Your lease, including term, options and any make-good clause
- Equipment quotes or the franchise disclosure document for new projects
- Recent BAS and financial statements if you have them
The break-even calculator is useful for showing a lender how many members a new site needs before it covers its costs.
An example: a reformer studio opens a second site
Not a real business; the figures are illustrative. A reformer Pilates studio on the Sunshine Coast has run for four years with 14 reformers and a steady waitlist for peak classes. The owner finds a second site in a growing suburb nearby and plans 16 reformers and a smaller fit-out.
The project needs roughly $180k: about $90k for reformers and accessories, $65k for the fit-out, and the rest to cover rent and instructor wages until the second studio’s classes start filling.
The owner’s bank offers equipment finance on the reformers but wants property security before lending for the fit-out. Rather than putting up the family home, the owner takes a mix: equipment finance on the reformers, plus an unsecured term loan sized on the first studio’s strong, steady direct debits, which the lender reads alongside membership reports showing low churn. The owner pre-sells foundation memberships at the new site, but at a modest discount and on monthly billing rather than annual prepayment, so the cash coming in matches the classes being delivered.
Building the next stage of your gym
Fitness owners talk about progressive overload: steady increases, never more weight than you can handle. It’s a decent rule for business debt, too.
When you’re ready, the form is roughly sixty seconds of typing, and enquiring has no effect on your credit rating. Your gym’s details aren’t sprayed across the lending market. Someone on our team works through your membership numbers and plans, then calls for a proper conversation. Honest member counts, churn figures and lease dates help us land on a sensible option at the first attempt.
Frequently asked questions
Can I finance gym equipment if I'm just starting out?
Often, yes. Commercial gym equipment and reformer beds have an active resale market, so lenders can take the gear as security through a chattel mortgage or equipment loan. A deposit, a good personal credit history and a signed lease help. Unsecured loans for the fit-out are much harder to get before you've traded.
Do lenders count prepaid memberships as income?
They count them carefully. If members have paid upfront for a year, that money is effectively owed back in services. A lender will see a big cash inflow but also a liability, and may ask how much of your current bank balance is prepaid membership.
Is it easier to borrow for a franchise gym?
Sometimes. Established fitness franchises come with a known model, training and site selection, and some lenders have franchise finance programs for particular brands. You'll still need to show your own capacity and usually contribute a deposit. Check the franchise disclosure document and the costs of refreshing equipment.
How do quiet months affect a gym loan?
Lenders look at twelve months of bank statements to see the seasonal pattern. Most gyms gain members in January and after Easter and lose some in winter and before Christmas. Repayments need to be affordable in the lean months, so lenders often size loans on your average or lowest months, not the January peak.
Will a bank lend to my gym?
Banks do lend to established gyms with steady memberships, solid accounts and owners who can offer property security. When you fit those criteria, the bank's offer is worth serious consideration because it's often the cheapest. Newer studios or owners without property often find non-bank lenders more flexible.