Fitness Center Feasibility Study in Illinois

Exactly at its national weight

Illinois holds fitness lending at its national weight: the location quotient is 1.00x. The state ranks 7 of 54 for fitness center loans and the class stands 4 of 39 within Illinois, on 440 approvals worth $219.6 million from FY2017 to FY2026. The Illinois median loan of $294,500 is 1.14x the national fitness median, inside our margin, and neither outcome floor clears that margin against both Illinois and fitness lending nationally either. The middle half of Illinois gym loans ran from $113,675 to $557,250. Volume dipped to 34 approvals in both FY2019 and FY2020, between 58 in FY2017, worth $28.0 million, and 63 in FY2025.

Losses that arrive late

The charge-off record is the part a lender should read twice. Illinois fitness loans that funded during FY2017 through FY2021 number 186, and 9.7% of them at minimum have ended in charge-off, yet just 3.2% went bad within five years of approval. Most of the Illinois loss arrived after year five, a stage when lease renewals, worn equipment and brand refresh requirements can all come due at once. A clean early record therefore says less here than it seems to. Cancellation is a separate risk: at least 11.9% of Illinois gym approvals from FY2017 to FY2024 never funded, and 12.8% is the ceiling once undisbursed loans are added.

Programs, brands and lenders

Franchise concepts are 45.9% of Illinois fitness loans. SBA 7(a) carried 392 approvals and SBA 504 carried 48. The 504 loans finance fixed assets and run on a far larger scale here: Small Business Growth Corporation holds 24 worth $26.3 million and SomerCor 504, Inc. holds 18 worth $21.6 million. The Huntington National Bank holds 84 loans for $19.4 million, while Byline Bank holds 18 for $20.6 million, again a much larger ticket per loan. JPMorgan Chase Bank, National Association holds 26 and U.S. Bank, National Association 18.

For an Illinois fitness project, demand comes first. Cook County holds 176 of the approvals, DuPage 58, Lake 49, Will 31 and Kane 24, so most projects compete in a dense metropolitan field, and a study must count the clubs, studios and franchise units already within the site's drive time. Cost must include the build-out and the equipment an Illinois gym will need to replace before the loan is repaid. Coverage should be modeled beyond the ramp, through a lease renewal and an equipment replacement cycle, given where the losses fell. The appraisal must show what the collateral is worth without this operator, which for a leased gym is mostly equipment, and for a 504 building is the real estate in an alternative use.