You are opening or expanding a gym and the bank says fitness is too risky. How do you finance the equipment?

Some banks decline gyms as a category before reading the file. The reasoning is fixed costs — a long lease and a room full of equipment — against revenue that can cancel by the month. It is a judgment about the industry, and it is why gym owners on the forums report being told no by banks that never asked about the business, then being funded elsewhere the same month.

Equipment lenders think about it differently. Commercial fitness equipment holds value, has a resale market, and can be collected. A lender with the equipment as security is underwriting the equipment first and the category a distant second.

A gym with six months or more of deposits is a good file. Memberships draft on the same days every month, the pattern is visible from across the room, and a funder can size an offer to it in minutes. Equipment financing for an expansion — a second row of cardio, a turf area, a new rack line — runs two to six years with the vendor paid directly.

Working capital for the expansion's buildout and marketing is a separate product on the same statements, half to one and a half times a month's drafts, funded in one to three business days. Keep the two separate: the racks on the equipment loan, the flooring contractor and the launch campaign on working capital, so the racks get the cheap money.

A gym that has not opened has no drafts to read, so the lender reads what it can: your personal credit, your experience in the industry, the lease, the pre-sale — founding memberships sold before opening are the single strongest thing a new gym can show — and the equipment list itself. Expect a down payment of 10 to 20 percent and a shorter term than an established gym would get.

Used commercial equipment from a dealer cuts the number substantially and finances the same way. Gyms close, and their equipment is sold in lots at a fraction of new. A dealer's used line with a short warranty is a better financing candidate than a private-sale lot, because the lender can pay a dealer and inspect a warranty.

A gym's revenue is its members, and members cancel in a click when the AC fails, the floor floods, or the rack they came for breaks. A business line of credit, set up once the drafts are established, is what turns those into a two-day problem instead of a two-month one. Apply for it in a good quarter, not the week something goes wrong.