I need $150,000 to lease a gym, buy equipment, and cover expenses while revenue builds up. I've managed this kind of operation before and know firsthand it's feasible.
I only have $30,000 of my own money to invest so I want to borrow the remaining $120,000. The problem is that there's a 30% down payment requirement for SBA loans.
Could I have a friend loan me $21,000 so between that and my own $30k I have $51,000 for the down payment on a $170,000 loan, then pay the friend back his full $21,000 out of the $170,000?
ya.. what the world really needs for you to do with 150k of capital is to make another gym...
Thanks anon. I suppose I could structure it as a loan but you're right, it would probably look riskier to the lender.
What if someone were to just borrow the friend's money now, then season it in the account for a few months to avoid the bank's questions?
So... It seems as though you have a proven strategy which works, but you are attempting to leverage into a strategy which has unknown results.
Might you consider subleasing a gym, say, 2 nights a week for $40K and testing the waters to see if it scales well?
If real estate investing has taught me anything, its that the rental/leasing market is fairly efficient. I wouldn't expect that "owning a gym" brings more than an addition 5% to your bottom line.
Parkour and free running. All kinds of bars, walls and structures to jump and swing around on. Bounce floor over much of the surface.
We're subleasing one night a week at a cheerleading gym and there aren't any other suitable places that are available to rent. The current place has the other 6 days booked solid with other things.
We also can't store our equipment at the one night a week subleased gym so the current arrangement is limiting our growth. We average over 100 paid attendees per week and they pay $5 to $10 apiece so it's not like we can't find members.
I've also helped build other parkour gyms around the country and have seen firsthand what has worked and what hasn't.