Fitness Center Feasibility Study in Maryland

Maryland gyms: small tickets, real losses

Maryland's fitness book combines small tickets with real losses. Maryland lenders approved 213 SBA fitness center loans worth $74.8 million from FY2017 to FY2026, ranking 21 of 54 among states, and gyms sit 4 of 39 among Maryland classes. At 1.09x, the location quotient sits a touch above parity. The median Maryland gym loan is $150,000, only 0.58x the national median for fitness centers, but our screen, which tests against the state's all-class record as well, does not flag the cell.

A single bank's book

Manufacturers and Traders Trust Company holds 105 of the 7(a) loans, worth $18.4 million, so a single lender carries a large part of Maryland's gym lending. Citizens Bank, Truist Bank, The Huntington National Bank and PNC Bank, National Association hold 6 each, PNC's for only $266,500. SBA 7(a) carries 210 approvals and SBA 504 just 3; Maryland gym loans range from $33,000 to $365,000 in their middle half, and franchise units are 34.3% of loans. Baltimore County has 37 approvals and Montgomery 36, then Harford 23, Frederick 22 and Anne Arundel 19.

Losses early and late

Of 89 Maryland gyms funded in FY2017 to FY2021, at least 11.2% are charged off so far, and 6.7% failed inside five years of approval. Cancellation after approval is at least 16.5% of FY2017 to FY2024 approvals, 18.4% at the ceiling. Volume has recovered lately, with 27 approvals worth $13.8 million in FY2025 and 28 worth $10.7 million in FY2026.

With losses this visible, a Maryland gym study must win the argument on membership. Demand testing should count members, not visits: the households within a short drive willing to pay the planned dues, set against the franchise studios and big-box gyms nearby. Cost should be priced from build-out and equipment quotes, with a reserve for replacement. Debt service coverage needs a membership ramp, churn assumptions and a stress case in which a competitor opens close by, since the record shows losses both early and late. For an acquisition, the appraisal of a gym is mostly a business valuation, and the price should be checked against dues revenue the seller can prove.

The cell's figures cover SBA-guaranteed loans only and show each loan's current holder; Maryland gyms financed outside SBA are not represented, and all rates stay floors while loans remain open.