Gold’s Gym Franchise Owners Take on the SBA 504 and 7a Programs: The 504 Loan Prevails

Vicente Solbes and Martina Solbes-Moran are the proud owners of four Gold’s Gym franchises around the coast of Central California. They opened their first gym in 2002 in the Santa Cruz County town of Watsonville and have been hooked ever since.

After nearly 20 years of leasing property for their gyms, the power couple decided to make the switch from leasing to owning. While Vicente and Martina are veteran business owners and operators, they were new to the world commercial property ownership.

With the help of an SBA 504 loan from TMC Financing, the Solbes purchased the 14,000 square foot building they were leasing in Watsonville for $4,000,000 and only 10 percent down. By utilizing the SBA 504 Program, they also obtained a below-market interest rate, fixed for 25 years.

“Owning our building is so beneficial to our business,” Solbes states. “The flexibility is so much better, I don’t have answer to a landlord, the tax savings are great, and we have stability. All these aspects combined make a huge difference.”

Their gym, located at 120 Westridge Drive, features state of the art amenities and offers a variety of classes including muscle cardio, circuit training, Zumba, and Cycle.

Coincidently, while the Solbes were closing on the Watsonville property, they were also in the process of purchasing the building their Hollister gym was operating out of, but for this project they utilized the SBA’s 7a program.

According to Bruce Whitaker, TMC Financing’s senior vice president of business development who facilitated the 504 deal, both SBA programs can be utilized by small business owners looking to purchase fixed assets, such as real estate or equipment, for their business. TMC Financing is the nation’s No. 1 provider of U.S. Small Business Administration 504 loans. The company has helped more than 5,000 business owners own their own real estate.

“Both the 504 loan and the 7a loan can be utilized by small business owners to purchase real estate or equipment for their business,” explained Whitaker. “If your business is in need of working capital, the 7a may be your best bet.

“However, if you need capital to buy or construct a building, the 504 loan terms beat those of the 7a loan. The 504 interest rate is always below-market and fixed while the 7a loan is often variable and tied to prime.”

Solbes found himself in agreement with Whitaker and stated he had a much better experience with the 504 loan.

“The 504 process was much shorter, the fees were better and our interest rate is a heck of a lot better,” said Solbes. “The support we received from TMC was unbeatable. This was the biggest loan we’ve ever taken out – and the only loan we have actually felt good about! We’d do it again in a heartbeat.”

Vicente and Martina Solbes are passionate about their work and have no plans on slowing down. The Solbes have an expansion plan in place and intend to open another Gold’s Gym in Soledad, California soon.

“We love being gym owners,” said Solbes. “We have the privilege of making a positive difference on people’s lives. We feel lucky to play a part in their growth and transformation. Owning our buildings gives us the security of being here for our members for the long haul.”

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