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Running a CrossFit Facility Tips and guidance on how to open and operate a CrossFit gym.

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Old 03-31-2012, 01:49 PM   #1
Noah Drew
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What bank did you use?

I am getting very close to going to the bank and getting the loan process started. I have a solid business plan and great credit with very low credit to debit. My question to you amazingly helpful people is, how did you secure your loan and who did you secure it with?

I hoping for some pointers or tricks you used.
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Old 03-31-2012, 09:02 PM   #2
Brian Strump
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Re: What bank did you use?

Didn't use a bank.

Also, they do not care what your personal credit and debt to credit ration is now.....they care if you will be able to pay back the loan.

You can have a credit card with a $40,000 limit, and when you apply for a business cc, they may give you $8,000. Once you become a business, your personal assets don't mean much to the bank.
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Old 04-01-2012, 01:20 PM   #3
Noah Drew
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Re: What bank did you use?

Thanks Brian. I was wondering how they figure that stuff out. If I'm a new business and need about $40,000 do you have any idea how they would decide if I get it?
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Old 04-01-2012, 05:04 PM   #4
Brian Strump
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Re: What bank did you use?

Cross your fingers.

I would expect you would need to sign a personal guarantee if you go to the bank. Do you have a business plan? Thats a good start.


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Originally Posted by Noah Drew View Post
Thanks Brian. I was wondering how they figure that stuff out. If I'm a new business and need about $40,000 do you have any idea how they would decide if I get it?
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Old 04-02-2012, 07:44 AM   #5
Kevin Benson
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Re: What bank did you use?

I've been in banking for more than a decade and have underwritten many small business loans. As a start-up, the bank is relying more on you individually to pull this off, or finding a way to repay if things don't go as planned. In short I'd look at the following, more or less in order of importance:

•Personal credit history. If this is shoddy you probably don't stand a chance.

•Other income and assets outside the business. If things go totally south, can you find another job with enough income to repay the loan? And/or, do you have other assets that could be sold to repay?

•How much of the start-up costs are you funding, and how are you funding them? If you're trying to go with less than 50%, you may have a challenge. Gyms are highly competitive and gym equipment is pretty much worthless to a bank. Also, if you are borrowing personally to fund your portion that's far less favorable than if you saved up and funded with cash.

•You're personal qualifications in running the business. Have you run a business before? What industry specific experience or training do you have?

•Business plan, sales forecasts, membership assumptions... Think competition, sustainability, etc. Also, be prepared to show multiple scenarios of forecasts, i.e. base case, break even case, etc.

If you think you can go through these things and answer favorably, you're probably at a place where you can start talking to a bank. With that said, I would first look for smaller community banks or credit unions as they are a little more favorable to local businesses than the large commercial banks. Also, look for SBA lenders and the 7a program. The 7a program guarantees the bank loan and provides an incentive for the bank to extend a loan they may not normally do.

Finally, if you'd like me to look at your business plan I'm more than happy to do so. PM me and I'll shoot you my email address.
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Old 04-05-2012, 07:02 PM   #6
Greg Mattke
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Re: What bank did you use?

I have good credit, didn't want all the hassels with loan officer,I walked in and borrowed $15,000 on my signiture, unsecured loan. Bank has no intrest in my business, only my butt if I don't pay, lol.
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Old 04-07-2012, 03:49 PM   #7
Noah Drew
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Re: What bank did you use?

Greg, I love it! And I wish I only needed $15,000.
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Old 04-07-2012, 06:07 PM   #8
Ian Nigh
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Re: What bank did you use?

Work to save your startup capital, then use personal credit cards to open your business and pay them promptly with your savings.
It is a rare thing for an individual to walk into a bank and get a 40K loan for a startup CrossFit affiliate.
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Old 04-07-2012, 11:39 PM   #9
Katherine Derbyshire
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Re: What bank did you use?

Why do you need $40,000? How many paying clients do you need to support that loan PLUS your monthly overhead PLUS your personal income? What is your plan for obtaining those clients?

How do your monthly overhead and proposed monthly fees compare to those of other Crossfit gyms in the area? Explain the difference.

Having good answers to all of those questions may not get you the loan. But not having good answers will make it almost certain that you won't.

More importantly, if you can't answer those questions, you aren't ready to talk to a bank.

Katherine
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Old 04-09-2012, 05:42 PM   #10
Noah Drew
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Re: What bank did you use?

- I currently have 20 members in my garage gym. Realisticially I need $30,000 and I have $10k but I am havig to turn new members away and need to get into something bigger. My hope is to get into something of good size so I do not have to upgrade later, which is why it is so much. As for personal overhead, I have a good job and will keep it. The only change in my life is I'll be going to a gym and having to run numbers.

- I'll be charging a little less at first but have a plan to increase as I reach membership goals. My numbers will be compairable to other Crossfit's in the area. A friend of mine runs a Crossfit and has let me see his books.

Thank you for your feedback. I have done ton's of reseach, written a solid business plan and prepaired realistic numbers thanks to the help of everyone on this blog. The information posted on this site is the best education one could ask for.
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