Fitness Center Feasibility Study in Nebraska

Smaller tickets, steady demand

Nebraska fitness centers borrow noticeably less than their national counterparts. The agency's files record 78 approvals between FY2017 and FY2026 totaling $22.3 million, and the median loan of $168,500 is only 0.65x the national median. The state ranks 36 of 54 for fitness center loans, yet within Nebraska the class holds the 4 of 39 slot among asset types, and a location quotient of 1.12x shows gyms taking a somewhat bigger portion of Nebraska approvals than the national mix gives them. In plain terms, fitness is a prominent category for Nebraska small business lenders, but each deal is small. No outcome measure sets the cell apart, so the contrast lies in ticket size, not in how loans perform.

Programs, franchises and lenders

The middle half of approvals runs from $76,250 to $350,000, which suits a studio, a boutique concept or a franchise fitness unit far better than a large club with a pool. SBA 7(a) carried 72 of the loans and SBA 504 only 6, so very little of this lending funds owned buildings. Franchising accounts for 47.4% of loans, close to half, which is why standard concepts with predictable build-out costs are common. Union Bank and Trust Company leads the 7(a) table with 13 loans worth $2.2 million, Northwest Bank has 7, and First National Bank of Omaha has 5 loans worth the same $2.2 million, a much larger average. Geography is concentrated: Douglas County has 40 loans, Lancaster County 19 and Sarpy County 10, with a long tail of counties holding one or two each. Annual volume ranged from 3 loans in FY2017 and FY2023 to 11 in FY2019 and FY2024.

Cancellations claimed 9.7% or more of the loans approved over FY2017 to FY2024; the ceiling is the identical 9.7%, so nothing in the Nebraska file remains open on that question. Looking at the 34 loans that funded in the early cohort of FY2017 to FY2021, 5.9% have been charged off so far, and 2.9% were lost inside the first five years. Both are floors, and a cohort of this size moves a good deal with a single loan, so lenders should not read the rates with false precision.

Questions for the study

A feasibility study for a Nebraska gym has to separate the Omaha, Lincoln and Sarpy County markets from the rest of the state, because the lending record is concentrated there and a rural site cannot borrow that evidence. Membership demand should be built from the catchment population, the rival clubs and the monthly price the concept can hold. Cost testing should compare lease, equipment and finish-out against a loan near $168,500, and the payment coverage test should assume memberships build gradually and churn runs at a rate honest enough to survive a lender's review. With a charge-off floor of 5.9% in the record, a study that shows only a best case will not persuade. Because gym buildouts leave little resale value, the appraisal will rest on the business's cash flow, so the study should say how that cash flow is earned.