The gym and fitness industry is booming! Indeed, it can present a very profitable enterprise for businessmen, entrepreneurs and fitness enthusiasts alike. That said, the costs and capital required to start and maintain a business of this nature can be quite considerable indeed. However, help is at hand in the form of financing and financing institutions, and they can allow you to live out the fitness project of your dreams!
As such, being at the very heart of the fitness industry, we are often presented with the question about how to go about financing, from eager persons who wish to enter the fitness sector. With this in mind, we decided to address this particular topic in this post. Here we go!
To start things off, when approaching a bank, you will have to provide the following documents:
- Identity Proof
- A project proposal prepared by CA
- This proposal will have to contain the following sections, and furnish the following information:
- PROMOTERS’ BACKGROUND
- SCOPE OF THE PROJECT
- MARKET POTENTIAL & STRATEGY
- PUBLICITY & ADVERTISING STRATEGY
- PROJECT COST
- MEANS OF FINANCE
- EMPLOYEE BENEFIT EXPENSES
- MONTH-WISE PROFITABILITY STATEMENT
- BALANCE SHEET
- CASH FLOW STATEMENT
- REPAYMENT SCHEDULE
Here is a ready reckoner and a checklist of the documents and specifics that should be contained in the project proposal in further detail:
- Proof of Identity: Voter ID Card/Passport/Driving License/ PAN Card/Signature identification from present bankers of proprietor or partner of director (in case of a company).
- Proof of residence: Recent telephone bills, electricity bill, property tax receipt/Passport/Voter ID Card of proprietor, partner of director (in case of a company).
- Proof of business address.
- The applicant should not be a defaulter in any Bank/F.I.
- Balance sheets of the last three years of units, along with income tax/sales tax returns etc. (Applicable for all cases of Rs. 2 lakh and above.) However, for cases below the fund based limit of Rs. 25 lakh, if audited balance sheets are unavailable, then unaudited balance sheets are acceptable as per extant instructions of the bank.
- Memorandum and articles of association of the company/ partnership & deed of partners etc.
- Assets and Liabilities statement of promoters and guarantors, along with latest income tax returns.
- Rent Agreement (if business premises is a rental property) and clearance from pollution control board if applicable.
- SSI/MSME registration if applicable.
- Projected balance sheets for the next two years in case of working capital limits, and for the period of the loan in case of term loan (For all cases of Rs 2 lakh and above).
- In case of takeover of advances, sanction letters of facilities being availed from existing bankers/financial institution along with detailed terms and conditions.
- Photocopies of lease deeds/title deeds of all the properties being offered as primary and collateral security.
- Position of accounts from the existing bankers, and confirmation about the asset being standard with them. (In case of a takeover).
In addition, for cases with exposure exceeding Rs. 25 Lakhs, the following must also be provided:
- The audited balance sheets are necessary.
- Profile of the unit (including names of promoters, other directors in the company, the activity being undertaken, addresses of offices and plants, shareholding pattern etc.)
- Balance sheets of the last three years of the Associate/ Group Companies (if any).
- Project report (for the proposed project if term funding is required) containing details of the machinery to be acquired, from whom to be acquired, price, names of supplies, financial details like capacity of machines, capacity of utilization assumed, production, sales, projected profit and loss and balance sheets for the next seven to eight years till the proposed loan is to be paid, the details of labour, staff to be hired, basis of assumption of such financial details etc.
- Review of accounts containing month-wise sales (both quantity and value), production (quantity and value), imported raw material (quantity and value), indigenous raw material (quantity and value), value of stock in process, finished goods (quantity and value), debtors, creditors, bank’s outstanding for working capital limits, term loan limits, bills discounted.
- Manufacturing process if applicable, major profile of executives in the company, if any.
So there you have it!
Currently, at Gym Consultants India, we are helping one of our clients collate and prepare documents with a view to receiving a loan for his fitness project, and we can help do much the same for you, and in fact, do much more for you as well.
Do get in touch with us for any questions or queries you might have about fitness financing, gym loans, or anything concerning this industry – we’re only too happy to help! In conclusion, with Gym Consultants India and a viable financial institution or bank, you’ve got all the right ingredients to finance the fitness project of your dreams!