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The main purpose of the Small Business Administration (SBA) Express Working Capital Loan is to provide the funds necessary to support a company until the business generates positive cash flow.

The Best Working Capital Loan for Health Club Owners Today

One of the best options for health club owners looking for working capital of $20,000 to $150,000 is a Small Business Administration Express Working Capital Loan.

In 2014, the Small Business Administration (SBA) introduced the Small Loan Advantage program, often referred to as the SLA loan. If you are in need of a loan, this is one to consider.

One lender created an SBA Express Loan and capped the loan request amount at $150,000 to limit the risk since real estate collateral is not required. Instead, only business assets are used to collateralize the SBA Express Loan. The main approval requirements are good personal credit and some liquid assets. New and existing health club owners are eligible for this unique loan product.

The Small Business Administration (SBA) Express Working Capital Loan is a government-backed loan is designed to provide working capital ranging from $20,000 to $150,000 for start-ups and existing businesses. The main purpose of this loan is to provide the funds necessary to support the company until the business generates positive cash flow. The loan process can take anywhere from 30 to 90 days to complete before the loan is funded. The SBA loan process requires attention to detail to complete the application and contingency requirements. If the use of the loan funds is to finance a new location, the loan can be approved in advance; however, the funds will not be distributed by the bank until the new location has received a certificate of occupancy. This insures that the money will be used to operate the new business and will not be used to pay for build out expenses.

The interest rate for this loan is calculated by starting with the prime rate as published in the Wall Street Journal which is currently 4 percent. The bank charges a risk premium ranging from 2.75 percent to 4.75 percent on this loan so the interest rate will range from 6.75 percent to 8.75 percent depending upon the loan amount. The larger the loan amount, the lower the interest rate. For example, a $25,000 loan has an interest rate of 8.75 percent while a $150,000 loan has an interest rate of 6.75 percent. All SBA loans require closing costs, which typically range from 3-5 percent of the loan amount. Again, the lower the loan amount, the higher the closing costs, and the higher the loan amount, the lower the closing costs.   

This is a variable rate loan that will change when the Federal Board of Governors raises or lowers the rates. The most recent 0.25 percent rate increase raised the SBA loan payments on a $150,000 loan by about $18 per month. The repayment term on the loan is 10 years, and there is no pre-payment penalty, so if the business is profitable, the loan can be prepaid to save interest expense.

The $25,000 loan amount on the SBA Working Capital Express Loan deserves its own paragraph because it is an unsecured loan. No business assets or personal assets are required as collateral for this loan. It is a quick process that can take less than a month to close if the business owner focuses on the required forms. There is no competitive product available to a new or existing business owner now. In my opinion, this is the best product on the market today for a $25,000 business loan that can be used for any business purpose.

The purpose of using SBA loans is to access other people’s money (OPM) and preserve the club owner’s capital. The goal is to borrow the money at a cost that is less than the business profit percentage. For example, an SBA working capital loan has a 6.75 percent interest rate. Assuming the fitness center operates at a 15 percent profit margin, the club owner is using OPM at a cost less than half of their anticipated return on capital. The best part about the SBA Express loan is that the collateral is the business assets, not the club owner's home.


Paul Bosley is managing member of, which does business as Business Finance Depot. He can be reached at

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