The coronavirus pandemic has been a learning experience for many business owners. For instance, never has it been more pronounced that flexibility, mobility of operations, and the ability to react to unprecedented events and make wise business decisions fast are crucial for businesses to ride the tide when a crisis washes over their industry.

Gyms and health and fitness establishments were among the businesses most severely affected by the pandemic. As companies that relied a lot on walk-ins and members using on-site facilities for revenues, gyms saw sharp declines in capital. Many were forced to close down permanently.

Unfortunately for some gym owners, closing their doors did not end their financial turmoil because they were still in the middle of paying off the equipment they purchased through bank loans and investor equity. Gyms that opted for equipment leasing fared much better in comparison.

The Benefits of Leasing Gym Equipment

The situation above has highlighted the importance of gym equipment leasing, especially for independent business owners who don’t have financial support from a franchisor. As the coronavirus pandemic has demonstrated, assets in the form of specialized equipment are difficult to liquidate.

Businesses not saddled with the long-term responsibilities of equipment ownership (e.g., 5-year payment plans, maintenance, and repair expenses) had the advantage of decommissioning equipment with minimal financial losses.

Here are some other benefits of leasing gym equipment that are proving to be extra useful during this pandemic:

  • Your capital is not tied up to your equipment. When you buy any equipment, you’re effectively signing off a percentage of your expected monthly revenue to their repayment. Renting gym equipment significantly reduces that monthly bill. The business has to pay only for as long as the equipment is needed, or until the lease contract expires.
  • If your monthly membership reaches substantial numbers, it can easily cover the cost of your monthly lease.
  • Rent-to-own schemes are available, and these arrangements typically spread the cost of acquisition over a longer period. Essentially, you pay less each month but will gain ownership of the equipment at a much later date. This is not a loss since the cost-benefits of gym equipment do not come from ownership but from utilization.
  • Interest rates for leasing are often fixed and unaffected by economic upheavals (unlike financing contracts for equipment acquisition with variable interest).
  • You have an opportunity to buy equipment at discounted prices. Of course, these pieces of equipment are unlikely the newest models on the market. Still, you could be first in line to purchase well-maintained equipment that customers don’t mind if they’re not brand-new (e.g., weights, bench presses).
  • It’s easier and more affordable to upgrade to new equipment when you’re leasing. You can simply not renew your current contract and ask for a new lease agreement for more modern gym equipment.

Leasing does not guarantee that a business will experience zero financial fallout in events like the current pandemic. It can, however, soften the blow. If ownership is your long-term goal, you can reduce your gym’s financial liability by leasing the machines and equipment with technologies that advance rapidly (e.g., elliptical machines and treadmills).

Regents Capital Is Here for Gyms in Tough Times

Our founders at Regents Capital have been providing equipment financing advice and solutions for decades. Which means we can advise you on your leasing plans and needs!