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How Canadian Service Businesses Can Finance Facility Equipment (Child Care, Gyms, and More)
Canadian child care centres, gyms, and other service businesses usually finance facility equipment with equipment leases, vendor and rent-to-own programs, and (when needed) working capital loans or lines of credit. The most sustainable approach is to let the equipment pay for itself out of membership and fee revenue, while keeping bank borrowing power free for payroll and rent.
Across Canada, demand for these services is huge. In 2024 there were over 14,500 centre-based child care providers caring for more than 900,000 children, with over a million licensed spaces tracked nationally.(Statistics Canada) The fitness and recreational sports industry counted roughly 9,500 locations in 2023, generating about $5 billion in operating revenue in 2023, up almost 20% from 2022.(Statistics Canada)
Those numbers translate into a lot of play structures, treadmills, mats, spin bikes, classroom furniture, and security systems. Buying everything cash up front is rarely realistic. Let’s walk through how the better Canadian operators actually finance their facilities—and how a partner like Mehmi can structure those deals.
Facility equipment should be financed so that payments track the revenue it helps generate, not squeeze the very cash flow it creates.
For a child care centre, that might mean the playground and classroom build-out are repaid over the life of your license and government funding agreement. For a gym, it means cardio and weights are financed over their realistic useful life, not long past the point when members start to complain they’re outdated.
From a lender’s perspective:
That’s why most serious operators lean heavily on Equipment Financing tools—like Mehmi’s Equipment Leases, Equipment Line of Credit, Asset Based Lending, and Refinancing or Sales Leaseback—and reserve traditional Business Loans for working capital gaps.
Most of the hard assets inside your centre or studio can be financed, especially via leases.
Child care centres and daycares typically finance:
Canadian playground suppliers and design firms explicitly highlight financing and phased build options because a fully compliant playground can cost tens or hundreds of thousands of dollars.(PlayPower Canada)
Gyms and fitness studios usually finance:
Multiple Canadian providers advertise gym equipment financing, lease-to-own programs, and rental options for new and used equipment, confirming that leasing is now the norm in this space.(Keystone Fitness)
Other service businesses (examples):
If it’s durable, essential to service, and has reasonable resale value, it’s likely eligible under Mehmi’s Equipment Financing umbrella and appears on or adjacent to our Eligible Equipment list.
Service businesses have five main tools, and you’ll usually combine a few of them rather than rely on just one.
Equipment leasing spreads the cost of facility equipment over its useful life with fixed payments and flexible end-of-term options. It’s the backbone solution for both child care and fitness equipment.
Specialty lessors and many Canadian equipment suppliers emphasize leasing for big-ticket items like playgrounds and fitness machines because it:
With Mehmi’s Equipment Leases you can:
This keeps your main bank Line of Credit free for rent, payroll, and promotions instead of being tied up in turf and treadmills.
For equipment you’re not sure you’ll want in five years—like trendy fitness rigs or specific early-learning environments—rent-try-buy structures can make sense.
The model is similar to Mehmi’s Rent Try Buy Hospitality for restaurant gear:
This approach is popular with fitness and playground providers who offer pilot installs or phased projects. It reduces the risk of locking into equipment that doesn’t actually fit your program or membership base.(Keystone Fitness)
Many playground, fitness, and classroom-furnishing suppliers either:
The upside: you can bake financing into the initial quote and sometimes get preferential pricing or promotional terms. The downside: you’re often limited to that vendor’s equipment and structure.
Working through an independent partner like Mehmi—often via our Vendor Program—lets you:
Bank term loans and lines of credit are still part of the stack, especially when:
But for equipment specifically, loans are blunt instruments. The bank usually wants broader security over the business and less flexibility on structure.
That’s why Mehmi tends to use loans sparingly and in defined ways:
If you’ve already paid cash for equipment—or you used expensive financing early on—a Refinancing or Sales Leaseback can free up cash without disrupting operations.
Through Mehmi’s Refinancing or Sales Leaseback service:
Playground manufacturers and soft-play providers in North America also highlight lease-purchase programs that serve this same goal: reduce cash strain while still providing compliant and attractive play spaces.(LTC)
For child care, the equipment discussion is inseparable from regulation and public funding.
Lenders look at:
Statistics Canada and child care researchers report roughly 1.3 million licensed child care spaces across Canada, mostly in centres, with ongoing government commitments to expand spaces and bring parent fees down.(Childcare Canada) That’s positive from a lender’s perspective, but individual centres can still be fragile if occupancy drops or wages spike.
For a new or expanding centre, a sensible structure might be:
We often pair these with a modest Working Capital Loan to cover staff hiring, curriculum development, and marketing until the centre is at steady-state enrolment.
Contrarian opinion: Many operators wait for grant funding to cover big pieces like playgrounds. That can take years, and in the meantime, you’re turning away families or operating in a sub-par environment. Used wisely, a lease that fits your fee and subsidy structure often beats waiting indefinitely for the “perfect” grant.
Gyms have fewer regulatory hurdles than child care, but much more churn risk.
When a lender looks at a gym equipment deal, they typically focus on:
Industry reports show that Canada’s fitness sector has rebounded strongly, with operating revenue for fitness and recreational sports centres reaching about $5.0 billion in 2023 and industry analysis suggesting continued growth into 2025.(Fitness Avenue)
For a new facility or refresh, you might see:
Some gyms also experiment with rent-to-own or lease-to-own programs that let them regularly swap equipment to keep up with trends. Canadian providers specifically market these options as a way to keep facilities modern without huge capital outlays.(Keystone Fitness)
One thing I push back on: ultra-long terms for equipment that members notice first when it’s old (like cardio). If your treadmills look 15 years old but you’ve still got 24 months left on the lease, retention will suffer. Sometimes paying a bit more each month for a shorter term is cheaper than constant member churn.
The same principles apply across other service niches.
Mehmi’s Industries and Business Loans pages outline how we adapt structures to different sectors; the common thread is matching payment plans to how your actual cash flow behaves, not the other way around.
You don’t need to be a finance pro to make the call. Use this as a simple rule-of-thumb:
If you’re unsure, Mehmi’s online Calculator can help you estimate blended payments (lease + loan) so you can see what your monthly overhead really looks like before you commit.
You don’t need a 100-page business plan to get financing right. You do need a clear story and a bit of prep.
Group your wish list into:
Share this with your equipment vendors and with Mehmi so we can map what fits pure Equipment Financing and what might need a Working Capital Loan or another tool.
Document:
This is what allows us to design seasonal, step-up, or ramp-up payment plans under your Equipment Leases or Asset Based Lending facilities instead of just defaulting to equal instalments.
For faster approvals through Mehmi:
Vendors who participate in Mehmi’s Vendor Program will often know exactly how to present quotes so they’re “finance-ready” from day one.
Most facility-equipment deals can start with:
Larger projects might also need financial statements and simple projections, but it’s rarely as heavy a lift as a large bank loan request.
Before you say yes to any term sheet, plug the proposed payments into Mehmi’s Calculator and stress-test:
If the math only works in the best-case scenario, you probably want to shorten your list of “nice-to-haves” or lengthen terms on some Equipment Leases.
A non-franchise operator in Western Canada decided to open a community hub that combined:
They had municipal support and a long-term lease on a repurposed building, but limited cash and no appetite to mortgage their homes.
Initial challenge
Their all-in equipment budget looked like this:
They also needed working capital for staffing and slow ramp-up on the fitness side.
The first bank they approached proposed a single large term loan secured by a general security agreement and personal guarantees, with equal monthly payments and no special seasoning. The payment would have eaten most of their projected free cash flow.
What Mehmi did instead
Working with their vendors and municipal partner, Mehmi built a layered structure:
Outcome
Two years in, the hub was running at near-full child care capacity with a stable base of gym members, and the owners still had room to invest in staff and program quality rather than pouring every spare dollar into old treadmills.
Yes. Most licensed child care centres in Canada finance at least part of their playground and classroom equipment through leases or structured payment plans. Playground suppliers and design firms explicitly offer funding and phased-build options for CSA-compliant play spaces.(PlayPower Canada) Mehmi can structure Equipment Leases and Refinancing or Sales Leaseback solutions so that your payments align with enrolment, fee-reduction programs, and funding agreements.
For most gyms and fitness studios, a combination of equipment leasing and an Equipment Line of Credit works best. Leasing spreads the cost of big-ticket items like treadmills and racks over 36–72 months, while a line of credit lets you add or refresh equipment as membership grows. Canadian gym financing providers widely promote these tools as standard practice for keeping facilities modern without draining cash reserves.(Keystone Fitness)
You can often finance quality used playground structures, cardio machines, or salon equipment, provided they have clear ownership and reasonable remaining life. Terms might be shorter and buyout structures different, but used is common in both child care and fitness. Mehmi’s Equipment Financing and Refinancing or Sales Leaseback options can cover both new and used assets, depending on condition and vendor.
There are grants and public funding streams for child care space creation, especially under Canada’s push toward more universal and affordable care.(Childcare Canada) Some municipalities also offer recreation or community-hub grants. However, grants are competitive and slow. In practice, many centres blend grants with Equipment Leases and Working Capital Loans from providers like Mehmi so they can build or expand on a realistic timeline rather than waiting years for perfect funding.
For start-up child care centres, gyms, or studios, lenders focus on:
You may be asked for more documentation and personal guarantees, and you might start with slightly shorter terms or ramp-up payment structures. Mehmi often uses step-up Equipment Leases and modest Working Capital Loans to give new operators breathing room during ramp-up.
A good rule: if it’s durable, essential to your service, and can reasonably be resold, it’s likely eligible. That includes playgrounds, gym equipment, classroom furniture, treatment beds, and security systems. You can sanity-check categories using Mehmi’s Eligible Equipment page and then speak with us directly to confirm details. If something doesn’t fit a lease, it may still be supportable under Asset Based Lending or an appropriate Business Loan product.
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