Fitness Center Feasibility Study in Connecticut

A top Connecticut class with small tickets

Fitness centers rank 4 of 39 among Connecticut asset classes, which makes gyms one of the most frequent SBA borrowers in Connecticut, and the location quotient of 1.04x shows them near their national weight. The 164 Connecticut approvals from FY2017 to FY2026, worth $61.7 million, rank 24 of 54 among states. Connecticut gym loans are small: the median of $160,000 is 0.62x the class median nationally. On our screen, though, neither that median nor the cancellation and charge-off floors sits apart from both Connecticut's all-class record and fitness centers nationally by enough to count as distinct.

Franchises, lenders and areas

Franchise systems account for 34.1% of Connecticut loans, and the middle half of Connecticut gym approvals spans from $60,000 up to $330,250, the scale of a franchise studio or an equipment refresh rather than a large club. SBA 7(a) carried 149 loans and SBA 504 carried 15. Manufacturers and Traders Trust Company leads with 25 loans worth $2.5 million; Santander Bank, National Association's 15 loans reach $8.2 million, the larger tickets; Liberty Bank has 11, TD Bank, National Association 10 and Newtek Bank, National Association 8. SBA's records mix Connecticut's older county names with its newer planning regions, so Western CT with 40 approvals, Fairfield with 31, Capitol with 27 and Hartford with 20 overlap in part. FY2018 was the busiest year, with 30 loans and $10.6 million.

Cancellations and late charge-offs

Cancellation claimed no less than 13.4% of Connecticut gym approvals over FY2017 to FY2024, 14.2% at the ceiling. Charge-offs reach 5.5% of the 73 Connecticut loans disbursed in FY2017 to FY2021, but only 2.7% fell inside five years of approval, so a good part of the loss came later, when equipment ages and leases come up for renewal. All of these are floors.

A Connecticut fitness feasibility study should therefore look past the opening membership drive. It needs membership demand and competing gyms and studios within the catchment, realistic pricing and churn, and a build-out and equipment budget set against a loan near $160,000. For a franchised studio, it should test the brand's royalty and marketing fees against local membership rather than the system's averages. Debt service coverage has to hold in the later years, with a reserve for replacing equipment, and if property is financed the appraiser should value the Connecticut building on its own as real estate.

Our data carries no coding limitation for fitness centers; Connecticut's figures follow the industry code on each loan.