Are you planning to open up your own gym? Then you surely know that a gym is only as good as the equipment it maintains.
How would you go about acquiring the best and latest weight and cardio machines on a limited budget? Is your bottom line better served by leasing or buying fitness equipment?
In Canada, 80% of small companies lease their equipment—and for good reason. Leasing allows companies to lower upfront costs, regularly update their equipment, and enjoy tax benefits. That is not to say that buying outright is always a worse financial decision, but you should think long and hard if you want to go for permanent ownership.
First Capital Leasing Ltd. is a premier leasing and leaseback company in Canada, boasting an approval rate of over 95%. We offer financing solutions for every sector and asset, including fitness financing. If there is a piece of equipment you want for your business, we can get it for you at flexible and advantageous rates. Call us today at 1-888-251-3644 or fill out the online contact form to see how you can build a first-class fitness facility with our lease and loan financing programs.
Why You Should Lease Your Gym Equipment
“Borrowing” admittedly does not sound as appealing as “owning,” but the former is often the superior financial decision when you are operating a business.
Here are some reasons why leasing makes sense for your fledging gym:
- Lower upfront costs: Premium interactive treadmills, mandatory in most gyms, cost at least $2,000 a piece. If you buy 10 of these, that is $20,000 out of your pocket. Add in the ellipticals, the step machines, and the plethora of weight machines and you could be easily spending more than $100,000 for the equipment alone. Even if you can afford outright ownership or the loans associated with the assets, having more cash on hand is always useful. You could use it to recruit an extra fitness trainer or hire a marketing agency to increase your revenue in the long term.
- Upgrade your gym more often: People against leasing often justify their position by saying that paying for something that they do not own is a poor investment in the long term. When the lease runs out, they are left with no assets. This is the wrong mindset when you are opening a gym. Owning your gym equipment is often a poor move. The fitness industry is brimming with research and development, and innovative gym equipment is released every year. If your gym is not outfitted with up-to-date technology, you will attract fewer customers. And because you would be owning obsolete pieces of equipment that nobody uses, you would have no choice but to sell them at a significantly depreciated price. Conversely, leasing your assets allows you to update them periodically so that you always have the latest machines to offer to your customers. This is not to mention that you would be only paying for the equipment’s depreciation!
- Enjoy tax benefits: If you are leasing your gym equipment as a fundamental part of your business operations (which you are because you operate a gym), your monthly payments can be written off on your tax returns. Leasing can also reduce your business’s taxable income.
When You Should Buy Gym Equipment
While leasing your gym equipment is generally financially sounder, you may justifiably buy or finance your stock under 2 circumstances:
The equipment is timeless: Free weights, weight benches, pull-up bars, and similarly simplistic equipment are rarely eclipsed by newer counterparts. A weight bench from the 1970s performs just as well as a brand new one from the factory floor. Because this kind of equipment does not need to be regularly upgraded, the flexibility that comes with a lease is less necessary. These timeless classics are often a one-time purchase that can last decades.
You want to customize your equipment: A lease comes with certain conditions, including the restrictions on modifying the object of the lease. This can be problematic if you are planning to customize your gym equipment, such as branding them with your business’s logo and colours. If you are committed to building a themed gym, buying your equipment could be your only option.
Outside of these 2 considerations, making an argument for buying over leasing gym equipment would be difficult.
Build Your Gym With First Capital Leasing Ltd.
Clearly, leasing your gym equipment is the right way to go most of the time. A lease gives you the financial flexibility to use your cash for other operating expenses and future-proofs your gym by allowing you to update its equipment more frequently. Reduced taxes are just the icing on the cake.
Buying should be relegated to simple, unchanging equipment like weight benches and pull-up bars, or if you really want to customize your gear.
Whether you have chosen to lease or finance your fitness venture, First Capital Leasing Ltd. is here to make it happen. Our 95% approval rate ensures that we will almost always have a payment plan that fits your budget. If you want to realize your dream of becoming a fitness entrepreneur without having to worry about unrealistic monthly payments, call us at 1-888-251-3644 or fill out the online contact form.
Why can’t I lease my gym equipment directly? Why work through First Capital Leasing Ltd.?
You certainly can lease your equipment by yourself, but your supplier may not be as flexible as we are. We offer tailored financing solutions at superior rates that perfectly align with your budget and timeline.
I bought my equipment, but now I have little cash flow. Can you help?
First Capital Leasing Ltd. offers multiple sales-leaseback plans. You sell the equipment you own to us, and we lease it back to you at advantageous rates. This frees up significant working capital which can be invested in expanding your business.
Does First Capital Leasing Ltd. offer financing or leasing solutions to start-ups?
Yes. We have worked with start-ups and Fortune 500 companies (and everything in-between) since our establishment almost 30 years ago.