Based on the survey, clubs generally approached three or more banks, and most received multiple offers. The only reason facilities did not receive more lending offers was because the clubs themselves stopped looking after receiving two offers.
Half switched banking institutions. The other half,which stayed with their present lenders, felt they would not have received the more attractive financing terms if they had not been proactive and had notcreated a competitive environment. All facilitiesbenefitted from lower interest rates; some lowered the rate by 1 percent, and several by 1.5 to 2 percent. Most were tied to either the bank’s prime rate or LIBOR (London Interbank Offering Rate).
Typically, the process required an independent appraisal and took several months, or longer. For asset-based lending, few covenants and restrictions were imposed. Most fitness centers also sought additional banking relationships, including other loans, lines of credit, working capital loans and equipment loans, and provided various types of deposits (e.g., money market accounts, 401k accounts and letters of credit).