Last Updated: 27th December, 2022


We are only accepting applications for commercial property loans with a minimum loan size of $500,000, and a minimum deposit of 30%. We apologise for the inconvenience.

Sports and recreation centres can be a lucrative commercial investment if you can find the right site with a strong tenant.

Rec centres come in all shapes and sizes so most banks see them as specialised properties.

However, there are some lenders that will still consider your recreation centre loan application depending on what you plan to do with the property.

How much can I borrow?

  • Recreation centre (freehold): Borrow up to 70% of the property value.
  • Borrow up to 100%: Using a guarantor or if you have enough equity in residential real estate. Only for standard commercial properties.
  • Sports centre business: Equipment finance is available.
  • Maximum loan term: 15-20 years or up to 30 years with a residential property as security.
  • Maximum interest only term: 5 years.
  • Loans over $5,000,000: Assessed on a case by case basis.
  • Taking over the business: Business plan and cash flow forecasts required.
  • Low doc options: Available for standard commercial properties.
  • Interest rate: Discounts vary from lender to lender and different rates apply to business finance.

Have you found a recreation centre?

We can give you an indicative funding proposal if you call us on 1300 889 743 or fill in our free assessment form.

Tell us a little bit about your situation and the property you had in mind.

Is it a standard commercial building or purpose-built?

Banks are very conservative when it comes to purpose-built or specialised commercial real estate.

The reason is that they tend to have a limited market of buyers since the property has limited alternate use.

This makes it really difficult for the bank to quickly sell the property at a reasonable price in the event that you default on your loan.

For example, a building with an in-built swimming pool and spa represents a higher risk than a rec centre with a lot of open areas (play courts) that can be easily altered for different recreational uses.

However, not all banks are as equally risk-averse. Sometimes the risks associated with the property can be mitigated or addressed if you have a strong, long-term tenant in place.

As part of the application, you should provide a copy of the lease agreement that’s in place.

If rental payments have been on time for the past 2 years and the lease comes with a couple of 5-year options, you’ll have a better chance of getting approved.

We can help!

We’re experts in recreation centre loans and we know how to build a strong case so you can get approved the first time around.

Loans for commercial real estate and business finance aren’t regulated under the National Consumer Credit Protection Act 2001 (NCCP Act) which means that lending policies can be more flexible than residential loans.

However, without strict lending policies, it means your recreation centre loan application will have to “wow” the credit officer to get over the line.

Your application needs to be presented like a business deal and we can help you do this!

With a specialist broker:

  • Save time and hassle.
  • Avoid getting declined.
  • Borrow the amount that you need.
  • Get negotiated interest rates.

Call us on 1300 889 743 or complete our online enquiry form to find out how we can help you!

Proving your income

You’ll typically need to provide the following:

  • Your last 2 payslips and a group certificate.
  • If you’re running your own business currently with the intention of taking over the lease on the rec centre, then you’ll need to provide your last 2-3 years personal business financials.

There are low doc options available!

That means some lenders will accept an accountant’s letter as an alternate form of income evidence.

This only applies if the recreation centre is considered a standard commercial purchase by a specialist lender.

How do banks value sporting and leisure centres?

In order to qualify for a recreation centre loan, the bank will need to undertake a valuation.

The most common way is using the capitalisation rate (cap rate) method.

The cap rate is used to work out the potential return on investment (ROI) for the sports complex based on the average net operating income (NOI) over the past two years.

The valuer compares this average NOI with similar properties of a similar size in the same location.

Strong performing sports centres will be priced at a premium.

Will the bank consider all types of sporting centres?

It depends on the lender.

Most of them can be conservative when it comes to specialised rec centres with purpose-built squash rooms and skating rinks, for instance.

However, as an example, if the current leaseholders have signed up for a 5-year lease with a couple of options, the bank may be willing to accept the property.

It just means the loan term will be reduced as per the lease agreement in place.

We may be able to help you qualify for a recreation centre loan no matter what activities or sports the centre allows for. This includes:

  • Gym/gymnasiums
  • Basketball
  • Futsal
  • Cricket
  • Netball
  • Dodgeball
  • Action ball
  • Touch football
  • Squash
  • Yoga
  • Pilates
  • Martial arts
  • Boxing
  • Rock climbing
  • Roller skating
  • Children’s play area including swing sets, jumping pillows and trampolines
  • Birthday parties and other events

Beware of zoning

Zoning can change on a regular basis so make sure you check with the local council to find out the zoning of the property you want to buy.

Ensure that the centre is zoned for recreational use (RE1 or RE2) and find out whether there are plans to rezone the area in the near future.

This can affect your ability to operate the leisure complex or attract tenants if you’re just looking to purchase the freehold.

Then again, it may present an opportunity if you’re a commercial or residential developer.

We can help you qualify for a development loan by presenting a strong business proposal to the right lender.

Can I get finance to upgrade the facilities?

We may be able to help you borrow a little more to cover the costs of minor repairs to the freehold building.

These fit-out costs may include replacing timber floors and courts, glass, windows, electrical work, plumbing, and refurbishing amenities, kitchens and reception areas. Basically, most fit-out work as long as it’s not major structural changes.

It just depends on the amount of equity in your residential property that you can use as security for the loan.

You also need to explain to the lender what improvements you’re looking to make and why they’re essential.

Are you buying the freehold as a going concern?

If you’re going to taking over the current lease, you need to provide more than just your most recent financials.

Business plan

For the banks to be confident in your ability to run a profitable business, you need to provide a business plan that shows cash flow forecasts for the business.

This plan needs to be discussed with a qualified accountant and should also include a SWOT analysis, an acronym that stands for Strengths, Weakness, Opportunities and Threats.

Basically, it’s the due diligence that you’ve undertaken on the property and the location and how these factors will help support a profitable enterprise.

For example, the sports centre may offer unique attributes, such as rock climbing or a child care area.

Another example is if the location of the property is experiencing a rise in new housing developments and a wider gentrification process.

The recreation centre may only cater to adults but, with young families moving into the area, it presents an opportunity to make additions to the complex to cater for children.


Typically, you need to have 5 years experience working in the industry in a managerial role.

Any referrals, awards, accreditations and diplomas or other examples of your track record will help your application.

Can I lend against the business?

We can’t help you to borrow against the value of the business.

One exception to this is with asset finance.

For gyms and fitness centre, it means you’re effectively able to finance the majority of the business costs.

That’s because gym sets, barbells, weights and other equipment are your main asset and make up most of the costs outside of staff wages.

It’s also the most tax effective way to manage debt.

The other exception is if you plan to buy a franchise fitness centre such as an Anytime Fitness or a Fernwood gym.

Check with one of our brokers about which franchises we can help you to finance as lending policies change on a regular basis.

Complete our free assessment form for more information about franchises.

Recreation centre tips

What to look for in a sports and leisure centre

  • Close proximity to public transport, main roads and highways.
  • Good street exposure.
  • Limited competition.
  • Located in an established semi-commercial and residential precinct (mixed use).
  • On-site car park.
  • The complex contains separate activity and meeting rooms, presenting a great opportunity for you to hire out the rooms on a regular basis.
  • Long term lease in place, for example, 3 years remaining with two 5-year options.
  • Rental payments have been on time for the last two years.

Due diligence on the existing business

There are a few questions to ask when buying a rec centre business.

The first question is why they’re selling in the first place.

If they’re selling because they’re reaching retirement age and can no longer handle the business, this makes sense.

If not, it may be a matter of mismanagement or something they’re not telling you. It’s ok to be a little paranoid when you’re spending a considerable amount of money!

Sit down with your accountant to go through their last two years financials to find out if the business is in the black.

You may want to then consider hiring a solicitor and a business broker that has experience in sports centres.

They can help you to negotiate the Heads of Agreement and Contract of Sale for the property.

For example, find out whether all plant and equipment is included in the sale price.

With other commercial properties, this refers to everything that’s bolted down but, with a rec centre, you may want to negotiate with the owner to include other equipment in the sale price.

For example, footballs, bats, punching bags, chairs, tables, nets and gym equipment.

You’ll likely be able to get a much better price than if you were to buy these items yourself.

Some rec centres have licences to provide child care services.

For example, it may have the capacity for 75 children and to provide Outside School Hours Care (OSHC).

Can you work with council to extend these licences in order to provide long day care and vacation care?

Other licences to be aware of

  • You’ll need a liquor licence if you’re planning to sell alcohol.
  • Canteens need to follow your state’s relevant food safety and OH&S standards.
  • The Smoke-Free Environment Act (NSW) or your state’s equivalent bans smoking in enclosed public places including indoor rec centres.
  • You and your staff will need to complete a Working With Children Check (WWCC).
  • Overall, all sports and leisure centres have an obligation to provide a safe environment for customers/members.

How the sports facilities sector stacks up

The sports and recreation facilities sector grew at an annual growth rate of 1.0% over the 5 years to 2016 (IBISWorld).

The popularity of organised sports and recreation has been spurred on by major sporting events held in Australia over the past few years including international soccer and cricket.

However, there can be high barriers to entry for these types of businesses since well-located rec centres are owned by the government (as community centres).

In addition to this, government funding is generally only available to not-for-profit organisations.

Another significant barrier to entry is the level of public liability insurance required for these types of organisations.

Do you need a recreation centre loan?

Call 1300 889 743 or complete our free assessment form to discover if you qualify for a recreation centre loan.