Fitness Equipment Financing: Leasing or Buying Gym Equipment

By MercFinancial · Published 2026-10-22 · Updated 2026-10-21

Gym equipment is the easiest part of a fitness business to finance because commercial-grade cardio and strength equipment secures the loan. Lease versus loan, used versus new, and an illustrative monthly cost against membership count.

Fitness equipment financing comes in three forms: an equipment loan or equipment finance agreement where the gym owns the equipment from day one, a $1 buyout lease that ends in ownership, and a fair market value lease that ends in a return, a renewal or a purchase at the then-current value. Equipment lenders, manufacturer and dealer programs and some banks write all three for gyms, studios and clubs, because commercial-grade cardio and strength equipment holds resale value and secures the deal. Of all the money a fitness business borrows, this is the piece lenders are most comfortable with.

This guide covers the difference between leasing and buying, why commercial-grade matters to a lender, how used and refurbished equipment is financed, refresh cycles and manufacturer programs, the Section 179 question, an illustrative monthly cost measured against membership count, what the equipment lender asks for, and where MercFinancial fits.

Lenders finance treadmills they could sell at auction tomorrow. Residential equipment and private-party used gear fail that test.

Lease or loan: what each structure does for a gym

The three structures finance the same treadmill and end in different places.

The loan and the $1 buyout lease are economically close: the gym pays for the whole machine over the term and keeps it. The fair market value lease is different money. Payments are lower because the lessor expects to get the equipment back with value left in it, and the gym is paying for use, not ownership. That suits cardio with a planned refresh, and it suits strength equipment the gym would rather own far less.

Terms commonly run three to seven years for new commercial equipment, shorter for used. Equipment lenders commonly ask for 10 to 20 percent down on a loan, or the first and last payments in advance on a lease, and the equipment itself is the collateral, with a personal guaranty from the owner on most small-business deals.

Why commercial-grade equipment matters to the lender

An equipment lender underwrites the collateral as much as the borrower. The question behind every approval is what the machine would bring at auction if the gym closed. Commercial-grade cardio and strength equipment from established manufacturers has a secondary market, so lenders finance it routinely. Residential-grade equipment bought from a consumer retailer has no meaningful resale channel and is treated as a consumer purchase, which is why a studio outfitted from a big-box store finds no equipment lender willing.

Soft costs sit in between. Delivery, installation, flooring, turf, mirrors, access control and software can often be rolled into the deal, but lenders commonly cap them at a share of the hard equipment cost because none of it can be repossessed and resold. A quote that is mostly flooring and screens with a few machines underneath will be restructured or declined. Keep the hard equipment the majority of the invoice, and put the rest in the buildout budget.

Used, refurbished and manufacturer programs

Used equipment splits into two markets that lenders treat very differently. Certified refurbished equipment from a dealer comes with an invoice, a serial number list, a warranty and a price, and most equipment lenders finance it, often on a shorter term than new. Used equipment bought privately from a closing gym has none of those things. The lender cannot verify the condition, cannot confirm there is no lien on it from the seller's own financing, and has no invoice to fund against. A few lenders will do a private-party sale with an inspection and a lien search, slowly and at a lower advance.

Manufacturer and dealer programs are the other lane. The major commercial brands and their distributors arrange financing at the point of sale, sometimes with promotional terms, deferred first payments during a buildout, or trade-in credit on a refresh. They are convenient and often competitive, and they are also one offer. A gym that compares the manufacturer's program against two or three independent equipment lenders knows whether the convenience is costing anything. The head-term guide to gym business loans shows where equipment sits in the rest of the file.

Refresh cycles and the Section 179 question

Cardio is replaced more often than strength. Members notice a worn treadmill before they notice a worn rack, so many clubs plan a cardio refresh on a shorter cycle and run strength equipment far longer. That difference is the argument for mixing structures: a fair market value lease on the cardio floor that returns at refresh, and a loan on the strength equipment the gym intends to keep. Lenders are used to this and will write both in one approval.

Equipment bought and placed in service in the tax year may be expensed under Section 179, subject to limits and the owner's circumstances. That generally applies to equipment the gym owns, which means a loan or a $1 buyout lease, and not to a fair market value lease where the payments are an expense instead. The guide to equipment financing and Section 179 covers the mechanics, and a tax adviser should confirm the treatment before a structure is chosen for tax reasons alone.

Illustrative example: monthly cost against membership count

Illustrative example, hypothetical and rounded: a new gym finances $150,000 of commercial cardio and strength equipment on a five-year equipment finance agreement at an illustrative rate, for a payment of roughly $3,200 a month. At $45 a month in dues, about 70 memberships cover the equipment payment on their own. A fair market value lease on the same package over the same five years might run nearer $2,800 a month, covered by roughly 60 memberships, with the equipment returned or bought at the end.

The point is not the rate, which depends entirely on the funding source and the gym's credit. It is the ratio. A lender looks at the payment against realistic membership projections, and a gym that needs most of its projected members just to cover the equipment payment has bought too much too soon. Phasing the purchase, with a smaller cardio floor at opening and add-on schedules as membership grows, is a structure lenders prefer.

What the equipment lender asks for and what gets declined

An equipment application is short: the vendor's quote or invoice with a model list, a one-page application, the owner's personal credit, bank statements for an operating gym or a business plan and proof of buildout funding for a startup, and the lease for the space the equipment is going into. Decisions on smaller tickets are often credit-score driven and fast, and larger packages get full financial underwriting.

The declines are predictable: residential-grade equipment, a private-party used purchase with no invoice, a quote that is mostly soft costs, a startup with no signed lease, and an owner whose personal credit cannot carry the guaranty. A gym already carrying two revenue-based advances is declined too, because the lender sees the daily debits in the bank statements and concludes there is no room for another payment. The guide to opening a spa or wellness studio covers the startup sequence.

Where MercFinancial fits

MercFinancial is a commercial funding broker in Houston, not a lender. For fitness equipment, the file is reviewed first: the quote, the structure the owner wants, the gym's credit and bank statements, and whether equipment is the whole need or one piece of a larger opening. From more than 160 funding sources, the equipment lenders and programs whose policy covers fitness equipment and the structure in question are identified, one file goes to all of them, and the offers are compared against the manufacturer's program. Whether a gym qualifies, and on what terms, depends on the funding source. Stephanie, the AI lending assistant, pre-qualifies a request in a few minutes with a soft credit pull, and a free 30-minute call with a funding specialist follows. See gym and salon business funding for the industry hub or business funding for every program.

Frequently Asked Questions

Should a gym lease or buy its equipment?

Buy, through a loan or a $1 buyout lease, what the gym will keep for years, which is usually strength equipment. Lease on fair market value terms what will be refreshed, which is usually cardio. The lease payment is lower because the lessor expects the equipment back, and the loan ends in ownership and a possible Section 179 deduction. Many gyms do both in one approval.

Can I finance used gym equipment?

Dealer-refurbished commercial equipment, yes: it comes with an invoice, serial numbers and a warranty, and most equipment lenders finance it on a somewhat shorter term than new. Used equipment bought privately from a closing gym is much harder, because the lender cannot verify condition or confirm there is no lien from the seller's own financing. A few lenders will do it with an inspection and a lien search.

How much down payment does fitness equipment financing need?

Equipment lenders commonly ask for 10 to 20 percent down on a loan, or the first and last payments in advance on a lease, with the equipment as collateral and a personal guaranty from the owner. Startups and weaker credit are asked for more, and manufacturer programs sometimes offer promotional terms with less. The exact figure depends on the funding source.

Can a new gym with no revenue finance equipment?

Often, yes. Equipment lenders underwrite a startup gym on the owner's personal credit, the down payment, a signed lease, proof that the buildout is funded and a business plan. The equipment is the collateral, so the lender's risk is lower than on a working capital loan. The one thing a lender will not do is fund equipment for a space that is not yet leased.

Does gym equipment qualify for Section 179?

Equipment bought and placed in service in the tax year may be expensed under Section 179, subject to limits and the owner's circumstances, and that generally covers equipment the gym owns through a loan or a $1 buyout lease. Payments on a fair market value lease are usually treated as an expense instead. Confirm the treatment with a tax adviser before choosing a structure for tax reasons.

MercFinancial is a commercial funding brokerage in Houston, Texas. MercFinancial is a broker, not a lender: every loan is made by a third-party funding source, every request is subject to that source's underwriting and credit approval, and loan amounts, advance rates, interest rates, terms, fees, collateral and guaranty requirements vary by funding source and borrower and are not guaranteed. Nothing here is a commitment to lend or an offer of credit, and financing is for business purposes only. Any example in this guide is hypothetical and illustrative; actual terms and outcomes vary. Health clubs and salons are licensed under state law, and prepaid-membership contracts are regulated in many states; financing availability depends on the funding source's policies. This guide is educational only and is not legal, tax, accounting or investment advice.