Yoga studio business loans

6 loan types to meet your yoga studio needs

1. General purpose business loans cover any one-off business expense, like installing a shower, buying an air conditioner or renovating your studio. Your funds come in one lump sum, with interest and fees which you pay over a fixed term.
2. Business lines of credit can help you cover your day-to-day expenses — like your utilities — when students aren’t coming in.
3. Merchant cash advance on future revenue from credit card purchases, which you pay back plus interest via a percentage deducted from your credit card sales.
4. Commercial real estate, in case you're looking to expand. These business loans are designed specifically to help businesses pay for new property.
5. SBA loans are government-backed loans available to businesses that have struggled to get funds from traditional lenders. Interest rates are lower than your standard business loan and you could borrow larger amounts to make major improvements, but you will have to pay a guarantee fee.
6. Equipment loans can help you purchase major equipment — like that industrial heater you need for hot yoga classes — with the equipment as collateral.

For a loan alternative, look at available grants

Organizations like the Satya Foundation, the Give Back Yoga Foundation and more offer grants to yoga studios and teachers alike. Typically you’ll need to have some social mission to qualify, such as working with an underserved community or providing therapy or outreach programs in schools. You might not be able to cover your entire costs, but it’ll help reduce the amount you need to borrow.

Know your business loan amount and how much it'll cost you

Once you nail down why you need the funds, follow these steps to come to an amount to borrow:

• Calculate how much you need to borrow to cover your yoga studio improvement needs. Go for a lender that can offer your business the amount that covers everything so you don't have to borrow from multiple sources.
• Compare different offers for the best APR, which is a combination of its interest rate and fees expressed as a percentage. You’ll get a more accurate comparison if you compare loans with the same loan term, since interest adds up over time.
• Ask about the loan's upfront costs such as origination fees or down payments. Be sure you can afford any upfront payments.
• Ensure the loan term works with your business’s cash flow based on how much you’ll pay each month, including interest. Long-term loans mean lower monthly payments but higher cost. Short-term loans have higher monthly payments but you'll pay less overall.
• Calculate how much you’ll pay each month using our monthly payment calculator to find out what repayment amounts could look like. Structure your budget to allow for repayment amounts — whether they're monthly, biweekly or even daily.
• Ask about prepayment penalties in case you end up being able to pay off your loan early. Some lenders charge a fee for prepayment, otherwise it's a great way to save on interest.

6 requirements to meet before you apply

Eligibility and document requirements vary depending on which lender you choose and what type of financing you need. Typically, business lenders are more willing to work with yoga studios that meet the following criteria:

1. In business for at least a year is the minimum track record a lender wants to see, plus your business’s financials to show you can afford the repayments.
2. At least $50,000 annually is what most business lenders require borrowers to earn before qualifying for a loan.
3. Located in the US, unless it’s a part of a larger company with headquarters in the US. Owners typically must be US citizens or permanent residents as well.
4. Have good or excellent credit, generally personal credit scores over 600 are enough. Your lender might also consider your business credit score when you’re applying.
5. Have a business checking account with recent statements as part of the underwriting process, and to deposit your funds. You might also be required to sign up for automatic repayments from a business checking account.
6. Have a business plan that's easy to follow, plus financial projections for future earnings.

Tips on yoga studio financing

Follow these tips to improve your chances at a better deal on your yoga studio loan:

1. Give sufficient attention to your business plan to make a successful case for yourself and your business. Invest some serious time in it to make sure it projects your studio in its best light.
2. Work on your elevator pitch to describe your studio’s mission, needs and finances. If your application necessitates an interview, it could boost your chances when combined with an effectively filled out application.
3. Read your credit report first to check for errors so your personal and business credit scores are what they should be. And a heads-up: You might have to pay a fee to get a copy of your business credit score.
4. Get someone else to read over your application to identify mistakes or inconsistencies. A fresh pair of eyes to review your application can save you from getting it thrown in the rejection pile.

6 tips to running a successful yoga practice

From planning your schedules and investing in web design to extending special offers, these will take your yoga studio to the next level.

1. Have a clear mission that you state on your website or in your brochure. Know and communicate what you’re trying to achieve with your yoga studio: To create a unified, peaceful environment for body, mind and spirit.
2. Know your community, especially the kind of neighborhood are you located in. Consider offering discounted class specials to draw in the people near you, lunch-hour classes if you’re in a business district or restorative yoga classes if you’re near a hospital.
3. Plan your schedules to meetyour community's needs. Classes before and after business hours are often the most popular, but offering several daytime might meet your demographic's demand. Finding the right schedule could take some tweaking.
4. Offer workshops and retreats to introduce people to yoga. Retreats are a great way to help your students deepen their practice and encourage engagement. Offer a limited selection of free yoga class podcasts or donation-based nights to help keep yogis engaged.
5. Spend on web design since it'll be the first thing your yogis see to learn more about your practice. Consider hiring professionals and even staging a photo shoot so your website shows your studio in its best light.
6. Sell stuff — and give stuff away to helpdraw in new students, or allow long-time ones to keep up with their practice. Sell yoga mats, yoga gear, books, T-shirts and more to help tide your studio over when you’re experiencing a seasonal drop in students.

Bottom line

You have a wide range of business loans to choose from to cover the cost of running — or even starting — your yoga studio. Finding the right loan depends on your business’s needs and means of repaying debt. Visit our business loans guide to learn more about your options and start comparing lenders.