Financing Your Next CrossFit Box


You have successfully launched your first CrossFit Box and it is profitable. What is your next step? Sit back and enjoy the fruits of your labor or build another Box? Most new gym owners pay the costs for their first Box from their personal resources.

When it comes time to launch another Box, that same game plan may not be an option. So what are your options? One option is find investors. However, that comes with a price: partners. Another option is to use the following debt financing options that exist in today’s market place. If this sounds appealing, read on.

Equipment Leases – Capital Leases to Own

CrossFit Box owners can finance the purchase of their strength and cardio equipment, security systems, computer hardware and software, flooring, outdoor signage, and other tangible items needed to open the second location with an equipment lease. All of the items that are being financed will be the collateral for the lease. The lease will be written to the business entity, however owner(s) must also personally guarantee the repayment of lease.

Lease documentation fees typically will range from $95 to $495. The money required as a down payment will range from one payment to 20 percent of the amount financed. The main benefit of an equipment lease preserves your operating capital. The borrower can select any repayment term ranging from 24 months up to 60 months. The longer the lease term selected, the less money the monthly lease payment. However, that then means the more money the total of payments. The same principle holds true for a house mortgage or an auto loan.

All lease payments are a tax-deductible business expense so the monthly lease payments will lower the taxable income and, in turn, the tax liability of the business. Since most owners plan to keep the equipment long term, they choose a capital lease, which offers a $1 or $101 buyout at the end of the lease term. In essence, a capital lease is used to finance the purchase of all the equipment needed to open and run the CrossFit Box.

Small Business Administration (SBA) Express Working Capital Loan

This unique government backed loan was designed to provide a business owner working capital ranging from $20,000 up to $150,000. The loan is available for both start-up and existing businesses. The main purpose of this loan is to provide the necessary working capital needed to pay bills and an owner’s salary until the business becomes profitable.

The SBA loan underwriting process typically takes 60 to 90 days to complete before the loan is funded and requires an attention to detail. If the loan is being used to finance a new or a second location, the loan may be approved in advance. However, the funds will not be distributed until the location has received a certificate of occupancy. This policy is in place to ensure that the money is not used to finance the build out expenses and is available for working capital once the new Box is open for business.

The interest rate is calculated by starting with the prime rate published in the Wall Street Journal, which is currently 3.5 percent. The bank charges a 2.75 percent risk premium, which is fixed for the entire term of the loan. Consequently, the interest rate on the SBA Express loan is currently 6.25 percent. There are three points that are charged as fees to package this SBA loan. When included in the amortization schedule, it makes a 6.9 percent effective annual percentage rate on this loan when including the interest expense and packaging fees.

The repayment term is 10 years with no pre-payment penalty. The best feature of this loan is that the collateral is the business assets, not your home just your business. When considering the annual percentage rate, the repayment term and the collateral, this loan product is by far the best financing product on the market today.


The main benefit of using debt financing is access to other people’s money versus securing equity financing, which requires bringing in business partners. The key to success when using debt financing is to access the money at a lesser cost than your projected business profit percentage. For example, if a $20,000 equipment lease has a 13 percent return to the leasing company and an $80,000 SBA Express Loan has a 7 percent interest rate, the business owner is accessing $100,000 at an 8.2 percent blended interest rate. Assuming your Box will operate at a 16 percent profit margin, your cost of using OPM is approximately half of your anticipated return on capital.

In conclusion, the equipment lease and the SBA Express Loan are complementary debt financing products. These products when used in unison can enable an entrepreneur with good personal credit the financing needed to open a new or second CrossFit Box.


By Paul Bosley. He has worked in the fitness industry for over 40 years both as an owner-operator and as a financing source. Paul is the owner of and can be reached by calling 800.788.3884 or by emailing