Is Leasing Equipment Right for Your Gym?
Equipping a full gym can be daunting (not to mention expensive), and thinking about the best way to pay for it is enough to make your head spin. At ASF, we know this because we’ve helped all kinds of clients throughout the eastern US build successful gyms. Whether you’re starting from scratch, completely refreshing your space, or just trying to find the best use of your budget, here are our top reasons why leasing may be the perfect fit for you.
What Are the Differences Between Leasing and Owning?
Many fitness equipment leases are similar to leasing a car, essentially enabling you to rent the equipment for a certain duration of time. In these cases, your leasing provider will purchase the equipment outright and you will make monthly payments to use it in your facility.
When you buy fitness equipment, you pay the entirety of the cost upfront and are then responsible for its use in your facility, maintenance, and removal of the piece when you decide to sell or get rid of the equipment.
The Two Main Types of Leases for Fitness Equipment
1) Fair Market Value (FMV) Lease: This type of lease is primarily used for cardio equipment; because of the numerous electrical and moving parts in each machine and the higher amount of usage that cardio pieces typically have, they often need to be replaced or repaired more frequently than strength equipment.
With an FMV lease, at the end of the lease term, you have the option to:
a. Return the leased equipment with no further obligation
b. Return the leased equipment & acquire new equipment under a new operating lease
c. Purchase the equipment for the ‘then’ Fair Market Value
d. Finance the Fair Market Value purchase option for an additional term
2) $1 Buyout Lease: This type of lease is an option for any category of fitness equipment, although it is most commonly used for strength equipment (racks, benches, cable machines, dumbbells) because it generally needs to be replaced less often than cardio. At the end of the lease term, you would own all the leased equipment for $1. Leasing strength equipment is beneficial from a budgetary perspective if you need to take what would be a large, upfront capital expense and spread out the payments with a low interest rate over the lease term (3-5 years). Since you will own all of the leased equipment at the end of the term, you would then have the option at any point moving forward to trade in some or all of it for a credit on new equipment.
What Are the Benefits of Leasing vs. Buying Gym Equipment?
1) It’s Budget-Friendly
Quality fitness equipment and machines can be expensive. Having the ability to spread payments out over time without having to pay for the equipment upfront is one of the main reasons our clients choose to lease. The ability to obtain premium commercial fitness equipment without taking on the capital expense of buying that equipment outright makes leasing a great way to get your gym started or refresh your space with new equipment. You’ll need to be cognizant of monthly or annual payments, but in many situations, leasing fitness equipment is a wise financial choice.
2) Gives You Access to the Latest Fitness Tech Every 3-5 Years
Leasing allows you to have all the positive impacts of on-trend equipment with the latest technology while spreading the payments out over time. The fitness industry is constantly improving, particularly in the cardio equipment category. Leasing will enable you to upgrade to new equipment every 3-5 years, meaning your facility will always have the latest fitness technology in terms of integrations, user experience, and product innovation.
Inspired to start thinking about tomorrow’s trends? Take a look at some trends we predict to flourish.
3) Decreases the Risk of Unexpected Costs
Fitness products are often complex machines with many moving parts. With regular usage, it’s natural for these machines to require maintenance and repairs from time to time. If you choose to lease your cardio equipment, you will significantly decrease the risk of unforeseen repair and service costs since equipment leased through ASF is covered with a 3-Year extended parts & labor protection plan.
4) Streamlines Your Operating Processes
If you manage multiple locations or properties, you can streamline your equipment upgrades for all sites into one lease and operating line item. This will eliminate the need for separate communications and orders, saving you valuable time. You will also have confidence knowing that your fitness equipment will be well-maintained throughout its lifetime and will be scheduled for regular upgrades every 3-5 years.
Interested in Leasing?
We hope this article has demystified the process and benefits of leasing fitness equipment. If you think leasing may be right for your business, our consultants can schedule a site visit, learn about your needs, and put together a comprehensive lease plan tailored to you. To get started, fill out our quick and easy contact form and we’ll be in touch!
