How Mindbody Capital Transforms Financing by Simplifying Growth Funding

Mindbody Capital offers a streamlined approach, eliminating credit checks, collateral and interest rates, allowing businesses to thrive without financial strain.

When membership numbers surpass projections, equipment needs change suddenly and the studio space seems a lot smaller than it used to, it’s time to grab momentum and grow. The problem is that many financing services don’t understand how fitness and wellness businesses operate.

Whether it’s updating equipment, expanding services, offering new classes, improving the member experience, or opening new locations, these investments are crucial for staying competitive.

A Mindbody survey found that 36% of fitness studios and wellness businesses say securing capital to grow is a top challenge. It takes, on average, 25 hours for a typical business to gather documentation and fill out forms for a loan that they are not guaranteed to get.

Growth funding accessibility can make or break a success trajectory. According to business funding matchmaker Fundera, nearly 30% of small businesses fail because they run out of capital, and only 48% have their financing needs met. This gap leaves many wellness entrepreneurs struggling to achieve their objectives.

By understanding the unique needs and dynamics of the wellness industry, Mindbody Capital provides a more streamlined and tailored approach to funding, empowering owner/operators to turn their growth ambitions into reality.

The Struggles of Securing Traditional Financing

Staying ahead of the curve in today’s crowded fitness market — as well as all the trends — is crucial. Customers expect it. Businesses need to continually evolve and innovate to attract and retain members, deliver exceptional experiences, and ultimately, thrive. The costs associated with these improvements can be substantial, and not every business has the necessary cash reserves to fund them outright (and not every business owner understands cash flow).

“While the pandemic disrupted the industry, businesses are now focusing on rebounding and rebuilding, as they look to fund payroll and hiring, fueling new marketing campaigns to win back former clients and acquire new ones, investing in new equipment and refreshing offerings, paying rent and fueling expansion, and more,” said Alice Shen, senior director of business development at Mindbody. “While all positive, businesses may require additional capital, which can be difficult to secure.”

Securing funding through traditional means can be a daunting and time-consuming process. Banks and other lenders often require strong personal credit, collateral or a personal guarantee. The application process can be lengthy, and even if approved, the terms may not be ideal for the unique needs of a wellness business.

Conventional funding channels also heavily scrutinize business performance history, which can be particularly challenging for those still navigating the aftermath of the pandemic. Considering interest rates still aren’t ideal, the process becomes even more complex and expensive.  This can leave entrepreneurs feeling stuck, unable to pursue their growth objectives or seize opportunities as they arise.

A Tailored Solution

Unlike traditional loans, Mindbody Capital bases its offers on a business’s integrated payment processing. Eligible Mindbody customers can access funding quickly and easily, with funds deposited in as little as 1-2 business days.

The cash advances available through Mindbody’s capital partners tend to have lower costs, with rates from 6% to 15%, while typical providers often charge upwards of 30%. This difference is made possible by Mindbody’s established customer relationships and access to sales performance data. Mindbody customers can take advantage of non-recourse financing with competitive capital fees, an option that is not widely available from other providers in the current market.

“Mindbody Capital offers pre-approved financing based on information that is already available in the Mindbody software,” said Shen. There are no applications, no credit checks, and no interest. Just a flat fee. Customers can accept as much as they need and leave aside what they don’t — and use the funds for whatever business expense they need to.”

One of the standout features of Mindbody Capital is its repayment structure. The cash advance is automatically paid off based on a percentage of daily sales. There are no monthly minimum payments, late fees or interest charges. This flexible approach ensures that repayment aligns with cash flow, making it easier to manage finances and invest in growth.

For example, imagine a yoga studio owner named Sarah who wants to expand her business. She decides to use Mindbody Capital because it offers better rates than traditional lending and transparent flat fees and receives a $50,000 cash advance to fund her renovation, new equipment and additional staff. Her repayment is automatically tied to her studio’s daily sales.

On busy days, a slightly higher percentage of sales goes towards repayment, while on slower days, the amount adjusts downward. This means Sarah doesn’t have to worry about fixed monthly payments that could strain her finances during slower periods or off seasons. Plus, there are no late fees or interest charges. The repayment process is seamlessly integrated with her daily sales through the Mindbody platform, making it easy for Sarah to track her progress and plan ahead.

Second Location Solution

Business owners have found Mindbody Capital to be a valuable tool for various growth initiatives. Some, like the franchisees of sensory gym We Rock the Spectrum , have used the extra funding to explore new marketing avenues.

“The extra funding has allowed owners to venture into new areas of marketing such as purchasing a booth at community events, do a stronger push on social media advertising, etc.,” shared Shane Stahl, chief marketing officer of We Rock the Spectrum.

Others have leveraged Mindbody Capital to fund expansion efforts, such as adding new services or taking over a former studio space. This has been particularly beneficial for franchises looking to grow their footprint.

“With some of our franchise owners expanding into their second location, Mindbody Capital has allowed them to purchase key pieces of equipment and supplies to assist with the build out of that second location, greatly facilitating the speed at which they are able to get these second locations open,” noted Stahl.

As the wellness industry continues to grow, so too will the need for accessible and flexible financing solutions. Mindbody Capital represents a significant step forward in meeting this need, providing business owners with the tools they need to build better gyms and studios, expand their reach, and deliver exceptional experiences to their clients and members.

For more information about Mindbody Capital, visit mindbodyonline.com/business/capital

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