Gym equipment finance
Whether you’re setting up a fitness centre or upgrade your current equipment, find out how gym equipment finance can help you achieve your business goals.
If you’re starting out in fitness or looking to overhaul aging equipment, you’ll want to maximise cashflow. You can begin or keep operating by financing your gym equipment using a variety of purchase and lease options. This way your leisure centre or gymnasium can stay current with all the latest equipment, maximising patron enjoyment and comfort.
What types of gym equipment finance options are available?
There are four main types of business-oriented finance products to help your gym gain the equipment it needs. These are equipment rentals, chattel mortgages, asset leases, and a rent to own option.
Equipment rental is equivalent to a hire purchase agreement in which a lender purchases the equipment on your behalf and charges a rent for their use over a set term. Equipment rentals are useful as they feature fixed interest rates and terms ranging from 12 to 60 months. Rental costs are also fixed by month. This is ideal for gyms that need the latest equipment. At the end of the term you can hand the gear back to the lender or purchase the equipment, based on the residual value remaining.
Chattel mortgages work in the same way as consumer loans. A lender gives you money to purchase the gym equipment outright. You then pay off the loan until the balance reaches zero and the mortgage is removed. These types of loans are secured against the property, which means a lender will pass on savings in more competitive interest rates due to taking on lower risk.
An asset lease, much like equipment rental, also sees the lender buy the equipment and leases it to your business. You can structure payments according to cash flow projections and add a residual value (balloon) to the lease to reduce repayments. At the end of the lease, you can start a new lease, sell the equipment, and pay off the lease, return the equipment, or purchase the equipment by paying off the residual.
Rent to own or rent to buy gives a gym the opportunity to try before purchasing. There’s no lock-in contract, and your business pays a fixed rent at a fixed interest rate. The advantage here is that you can purchase the equipment at the end of the rental period. If your gym isn’t producing the cash flow you’d hoped for, you can return the equipment for no additional cost.
Should I lease gym equipment instead of buying?
This all depends on your business individual needs and business situation. For example, leases and rentals may have lower upfront costs than loans, as some lenders may require a deposit. However, in chattel mortgages, you can borrow more than 100% of the value of your equipment to finance contents or liability insurance.
Leasing has an added benefit by giving your business the flexibility to hand back the equipment after a certain period, allowing you to upgrade and stay current with the latest trends in fitness. Leasing and renting also means your equipment are considered “off the balance sheet” and are not counted as assets in your overall business, which can have tax advantages such as claiming rental costs as a business expense.
However, if your business does not own the equipment and they are damaged or unsuitable for return to the lender, you may have to foot the bill for repairs and possible penalties.
Do I get any tax breaks or advantages for financing fitness equipment?
Yes – there are many advantages with financing fitness equipment. If you’re buying fitness equipment, your business may be eligible for the instant asset tax writeoff, which has been increased to $150,000 until 31 December 2020. For more information, visit the ATO.
In a chattel mortgage, your business can claim the GST paid in the purchase price, interest, and depreciation up to the depreciation limit.
In lease or rental situations, your gym business can claim rent or repayments as business expenses, as they are not listed as assets in your accounting. This is also known as “off the balance sheet.” For more information, please contact your accountant or financial adviser.
When renting or leasing, you can claim rental and/or lease payments as tax deductions which can further help your bottom line and put your business in a prime position for growth.
How does my business qualify?
Your business must currently be in operation and have a valid name, address, and ABN. Some lenders may require your business to have been operating for at least six months to a year.
You’ll also need to show your current assets and liabilities, profit & loss statements, and cashflow projections. You should also have a list of the equipment you wish to lease or purchase.
As a minimum, each applicant must be at least 18 years of age, an Australian citizen or permanent resident, and earn a minimum income. Your loan consultant will inform you of the exact figures required.
You can apply using our online application form or call 1300 974 066 to speak to your expert gym equipment loan consultant
Compare gym equipment finance lenders
Compare and save with Savvy. Savvy has access to all major banks and lenders in the country. We hold accreditation with all the major lenders in the country and have experienced consultants to tackle any requirement.
|Lender||Product Name||Advertised Rate||Comparison Rate||Monthly Repayment|
|Savvy||Secured Equipment Loan|| 4.99% |
|BankWest||Business FeeSaver Loan - Res Sec|| 5.80% |
|BankSA||Business Loan Variable|| 6.78% |
|ANZ||Business Loan Variable - Res Sec|| 7.10% |
|Commonwealth Bank||BBL Var Non-Res Sec|| 7.81% |
* Commercial loan with the loan amount of $40,000 is looking at a 5 year secured fixed rate of 2.85% p.a. and comparison rate of 3.93% p.a.. WARNING: all fees and charges may not be included on the example above, only the comparison rates, monthly repayment and total cost applies. Therefore, the total cost of the loan might be different. Comparison rate do not include broker fees, redraw fees, early termination fees and fee waivers. Comparison rate may change as a result of the different loan terms, fees and the loan amounts. Establishment fees and monthly fees do not apply to commercial loans, only consumer loans. However, there might be different fees apply.