Leasing Gym Equipment UK
Why leasing gym equipment makes sense
There is a famous quote used in the leasing sector from one of the wealthiest people of his time, John Paul Getty. He said, “I buy appreciating assets and rent depreciating assets”. On the back of this he built what is still one of the world’s largest art collections.” Gym equipment is a depreciating asset, it makes sense to lease it.
Pay for commercial gym equipment as you use it
Would you pay your General Manager his salary three years in advance? I expect not. So why not do the same with the gym equipment, it makes more sense to pay for it as you use it.
Match members subscriptions with the cash going out
Most business owners look to match income and expenditure. With most gyms collecting cash on a monthly basis, leasing is the easiest way to balance the books
Refresh your cardio and running machines every five years
Technology refresh is a big reason why companies lease computer equipment. The same logic applies to commercial gym equipment. Just lease your cardio and running machines and send they back in five years and keep your gym looking clean and modern.
Pay VAT on the gym lease rentals, not the full capital cost upfront
If you spend £40,000 on gym kit and pay by cash, you also have to find another £8,000 in VAT. With leasing, you only pay the VAT on the rental, which can all be reclaimed on a quarterly basis. This helps cash flow with no negative VAT implications.
Buy more and higher quality gym equipment
A £10,000 lease over five years will cost about £215+VAT per month. Why not buy another running machine and take out a £12,000 lease costing £258+VAT per month. The extra £43 maybe the cost of one gym membership but you are increasing the number of running machines by 20%.
Get great tax savings
HMRC give a 18% tax break on owning an asset. It is known as a “written down allowance.” Taking the example of £10,000 of gym equipment, you will get tax allowances of £4,486 over three years. With a lease rental, you will get the £10,000 plus the interest. Please call us and we can give you more details on how this works.
Leasing makes budgeting easier as you have a fixed monthly rental to input into your budgets.
Save your cash to invest in another gym
If you pay cash, that money is gone. Yes, you can argue you do not have a monthly rental to pay, but it does allow you to keep your cash in the bank for other purposes. Your second gym could be a reality.
Don’t use existing personal funds or bank credit lines
Keep an overdraft facility for the general working capital requirements of your gym. Do not go to the bank manager for a loan, keep this option in reserve for a rainy day. It’s a great insurance policy knowing there is a lease facility available if you need it. Leasing via WestWon will not affect any bank borrowing facilities, we are a third party leasing company.
A second quote is free, and it will save you money
Please call us today, even if it is for a second quote to get piece of mind. Scott Rogers heads up our Gym Division at WestWon. Email him at Scott.firstname.lastname@example.org or call on 01494 611 456. Look forward to hearing from you!