Fitness Center Feasibility Study in Michigan

Michigan gyms borrow less, mostly from one bank

Michigan's fitness center loans are small by national standards. At $179,550, the median sits at 0.69x what the class borrows nationally, the measure on which Michigan gyms differ from both the state's wider SBA lending and fitness lending across the country. A quarter of the loans are $50,000 or less, and a quarter exceed $425,125. Michigan ranks 14 of 54 among states on 344 loans and $135.2 million from FY2017 to FY2026. Fitness is 5 of 39 among Michigan's classes, yet the location quotient of 0.74x means gyms take a smaller share of Michigan SBA lending than the national share. Franchised clubs account for 43.0% of the loans.

One lender shapes this market. The Huntington National Bank holds 162 of the 344 loans, for $24.7 million. Fifth Third Bank holds 12 loans for $8.0 million and Live Oak Banking Company 10 for $5.2 million, while Horizon Bank and Stearns Bank National Association hold 8 apiece. SBA 7(a) carried 321 loans and SBA 504 just 23. Michigan Certified Development Corporation holds 12 of those for $12.7 million and Great Lakes Commercial Finance 8 for $17.3 million, so a handful of loans sit well above the median.

Michigan loss and cancellation floors

Charge-offs stand at 6.7% to date for the FY2017 to FY2021 disbursements, a cohort of 150 loans, and 3.3% inside five years of approval. Cancellations claimed 11.2% of the loans approved in FY2017 through FY2024; counting undisbursed loans lifts that to 13.7%. Lending bottomed at 19 loans and $4.7 million in FY2021, then reached $27.4 million on 39 loans in FY2025 and $21.9 million on 28 loans in FY2026, so recent dollars have climbed while the count has not. The larger recent loans have no performance history yet.

What to test before a Michigan club opens

Oakland County alone holds 95 loans, ahead of Kent with 48, Wayne with 43 and Macomb with 20, so a study should begin with those counties. The demand test should map members within an easy drive of the door, the low-price chains and boutique studios already there, and the realistic join and cancel rates for the format. Cost covers the lease, build-out and equipment, plus the opening marketing a franchise requires. Test coverage on a membership ramp that starts slower than the brand's best units and on the owner's actual draw. The appraisal depends on what the loan buys, and a study that ties cash flow to a believable member count is what supports it.