Business insights and growth highlights

How Fitness Centers Can Benefit From Payroll Financing

Jun 10, 2022 by Morris Reichman

Gyms, fitness clubs, and fitness centers all offer great ways for people to get in shape. It is a great business model, as you can adjust your rates based on your business and its specific services. For example, most fitness centers offer monthly or annual subscriptions at a reduced rate. Alternatively, customers can pay a higher rate to just come in for individual classes or services. Either way, you ensure that you have a steady flow of cash coming in.

Why Fitness Centers Struggle With Cash Flow Problems

However, the vast majority of gym-goers opt for cost-effective membership options, often with the option to pay more for access to certain exclusive services. This means that you will get a single payment from your regular customers once a month, once every three months, once every six months, or even once a year. If you always charge customers on the first of the month, you may struggle to keep your business up and running as you enter the second half of each calendar month.

Additionally, you will also need to consider that fitness centers do experience some seasonal fluctuations. Most gyms are full in January and February because many people have set New Year’s Resolutions to get in shape. However, many of these gym-goers taper off as the year goes on. Moreover, many people work out in the winter and spring to have a great body for the summer. This could mean fewer monthly subscriptions during the summer or autumn months.

In any case, you will have to continue paying the bills and paying your employees whether you have a lot of people coming to your gym during a given period or not. You will also have to pay your employees on time, even if the automatic subscription payment income has not been received yet. As a result, you may find that you experience short-term cash flow issues on a semi-regular basis.

What Payroll Financing Can Do For Your Fitness Center

In laymen’s terms, payroll funding or financing simply provides your business with a quick influx of cash with which you can pay your staff on time. Even though it works like a traditional small business loan, the structure is better and the payment terms are more flexible. This means that you will only have to pay interest for as long as you need the funds. As soon as you receive payments from your regular gym members, you can repay the loan without worrying about a lot of interest added on to the sum total.

If you find that you are struggling to keep your employees paid due to cash flow issues, payroll financing is often the best option. Rather than turning to predatory lenders that will charge you a fortune in interest, you can get a low-interest loan that will cover your payroll costs until your subscription payments come in. This way, you won’t have to worry about reducing your staff or even delaying their payments just to keep your business up and running.

Cash flow issues may affect many fitness centers, but it doesn’t have to be the case for your business. If your organization requires a small business loan for payroll to operate efficiently, call Payro Finance today to see how we can help.

Morris Reichman

hello@payrofinance.com

Morris Reichman is the founder and CEO of Payro Finance. Former Vice President at Infinity Capital Funding an alternative finance company, Morris possesses a versatile background in the finance industry. Having spent 7+ years working across global macro operations and start up corporate finance Morris's expertise is in business accounting, risk management and investment analysis. Morris founded Payro Finance to support business owners and ensure their business continuity.