Fitness Center Feasibility Study in Arizona

Fitness weighs heavily in Arizona

Fitness centers are 3 of 39 asset classes in Arizona SBA lending; a 1.21x location quotient confirms the class claims more of the state's loans than its national share would suggest. Arizona itself ranks 16 of 54 states, with 311 approvals worth $149.5 million from FY2017 to FY2026. Most of that is in the Phoenix area: Maricopa County holds 254 approvals, Pima 28 and Yavapai 8.

The headline measures stay near the norm. The median loan is $316,000, 1.22x the national fitness median, and the middle half runs from $139,400 to $558,100. Neither the Arizona median nor its cancellation and charge-off floors get past our distinctness margin when set against Arizona's all-asset book and fitness nationally, so this page reads as a typical fitness market with a strong local weighting rather than an outlier. Volume peaked at 43 approvals in FY2025, worth $22.0 million, then fell to 25 in FY2026.

Franchise units and early losses

Franchise concepts take 50.2% of loans, and the program mix of 285 under SBA 7(a) against 26 under SBA 504 fits leased units more than owned buildings. The Huntington National Bank holds 36 loans for $11.8 million, Wells Fargo Bank National Association 18, Midwest Regional Bank 15 and Zions Bancorporation, National Association 12. Arizona Capital Source appears on both sides, with 12 loans under 504 worth $14.6 million and 13 under 7(a).

The loss record is where a lender should spend time. Arizona fitness loans funded in FY2017 through FY2021 number 126; at least 7.9% of them ended in charge-off, and 5.6% failed before year five, so the bulk of Arizona's fitness losses came early in the life of the loan. Cancellation claimed 11.9% or more of Arizona fitness approvals from FY2017 through FY2024, and 13.6% at the ceiling. Both outcome rates are floors and can only rise.

What an Arizona fitness study has to test

Early losses point the study at the opening years. Demand has to be measured as members within a short drive of the site against the gyms and studios already there, and in Maricopa County, where this class alone drew 254 approvals, that competitive count matters most. Cost should include the full build-out and equipment package, whether leased or bought. Debt service coverage must hold through the presale and ramp period, not only at stabilised membership, and for a branded Arizona unit the study should set the franchisor's projections against local evidence. The appraisal will often rest on equipment and leasehold value, so the lender should know what those are worth if the doors close.