Fitness Center Feasibility Study in Louisiana

Louisiana gym deals that close

What sets Louisiana's fitness lending apart is how rarely approvals fall through. Only 4.5% of the gym loans Louisiana approved in FY2017 through FY2024 were later cancelled, and with none still undisbursed the ceiling is the same 4.5%. That cancellation rate sits well below, by more than our distinctness margin, both Louisiana's all-asset record and fitness centers nationally, and it is the gauge this page leads with. For a borrower it suggests that Louisiana gym deals, a majority of them franchised, tend to reach closing in the form approved, perhaps because a franchise system fixes the site, the build-out and the budget early.

The class carries weight in Louisiana. Fitness centers rank 4 of 39 among Louisiana classes, and a location quotient of 1.16x puts Louisiana gyms above their national weight, even though Louisiana ranks only 33 of 54 states on gym loan count. The state approved 101 loans worth $44.0 million from FY2017 to FY2026. The median of $250,000 is 0.96x the class figure nationwide, and Louisiana's middle half sits between $150,000 and $523,900. Franchised gyms account for 54.5%. Louisiana used SBA 7(a) for 96 of the gyms and SBA 504 for only 5. Fidelity Bank holds 10 Louisiana gym loans worth $6.9 million; Hancock Whitney Bank and The Huntington National Bank hold 6 each, and American Bank and Gulf Coast Bank 5 each. East Baton Rouge Parish leads with 16 approvals, Saint Tammany follows with 14 and Jefferson with 12. Lending fell sharply after FY2019, when 21 loans were approved, to 2 loans for $680,700 in FY2020.

Louisiana losses come later

Losses tell a less tidy story than cancellations. Of the 59 Louisiana gym loans disbursed in FY2017 to FY2021, 6.8% are written off so far, while 3.4% failed inside five years, so part of the Louisiana loss record arrived after the early years. Both rates are floors.

Testing a Louisiana gym plan

A Louisiana fitness center study should treat the easy path to closing as the start, not the proof. Demand testing means the population, income and existing gyms within a short drive, read parish by parish, since East Baton Rouge, Saint Tammany and Lafayette are different markets from Caddo or Ouachita. For a franchise unit, it means testing the system's membership ramp against this trade area. Cost testing covers the lease, build-out and equipment. A Louisiana gym's coverage of debt service has to survive member attrition and price competition over the full term, given the later losses, and a Louisiana loan near $523,900 carries less margin for error than one at the $250,000 median. With so few 504 loans, the appraisal usually values a business rather than a building, and Louisiana lenders lean on the franchise agreement and the owner's equity.