Fitness Center Feasibility Study in North Dakota

Close to the national pattern, with two metros

Fitness centers in North Dakota look typical: a location quotient of 1.04x, a median loan of $231,000 at 0.89x the nationwide median, and a central half from $91,000 to $407,500. The 39 loans approved from FY2017 to FY2026 total $11.0 million. The class ranks 5 of 39 among state asset classes, though the state itself is 43 of 54 by loan count. What the cell shows is how local the market is: Cass County has 16 loans, Burleigh 7, Ward 6 and Grand Forks 3, so four counties hold nearly all of the lending.

Product mix and the lender

The 31 loans under SBA 7(a) outnumber the 8 under SBA 504, and franchising reaches 28.2% of loans. Choice Financial Group is the only lender to reach the threshold, with 6 loans worth $2.1 million. The balance of 504 loans signals that some owners buy or build their facilities, which is rarer for gyms. In a state with long winters, an owned building also gives control over heating cost and lease terms. Lenders should ask whether an operator owns or rents, and what a realistic exit looks like.

Cancellation is low; the loss rate is unquoted

The cancellation floor for approvals through FY2024 is 8.6%, and the figure is the same once undisbursed loans are counted. Charge-off goes unquoted as the FY2017 to FY2021 funded pool is under 30 loans, and a blank is no proof of zero. North Dakota gyms operate in a small market where one closure of a major competitor, or the arrival of a national chain, can change the outcome for everyone.

What the study should answer

A study should map the real catchment around the site, count competing clubs and campus facilities, and estimate membership by tier. It must recognise that winter keeps people indoors and may help attendance, while harsh conditions affect travel. Revenue should be tested against rent or mortgage, payroll and, for franchises, royalty. The debt service test needs a cautious first-year membership count. Equipment appraisal is low, and a lender will watch the building value. These pages let both sides compare a proposal with what SBA approved in the state.