Fitness Center Feasibility Study in Pennsylvania

A Pennsylvania loss floor worth watching

Pennsylvania's fitness lending has an uncomfortable feature: 11.4% of the 176 gym loans disbursed in FY2017 to FY2021 are already charged off, and 9.1% failed within five years of approval. Since both are floors, the cohort's final losses will be at least that. None of this cell's metrics differs from both Pennsylvania's lending across industries and the fitness class nationally by the required margin, so the loss figure is a fact of this cell rather than a proven state effect. Even so, a lender reading this page should weigh it before anything else. Fitness ranks 3 of 39 among classes in Pennsylvania and the state ranks 8 of 54 for gym loans, with 431 approvals worth $204.8 million in FY2017 to FY2026, at a gym location quotient of 1.07x.

Loan sizes, lenders and the Philadelphia region

The median Pennsylvania gym loan is $225,000, 0.87x the gym median across the country; the central half of Pennsylvania approvals runs from $50,000 to $514,500. SBA 7(a) did most of the lending, 406 loans to 25 under SBA 504, and franchised clubs took 37.6% of loans. The Huntington National Bank holds 54 loans and Manufacturers and Traders Trust Company 48, while Wilmington Savings Fund Society FSB holds only 16, but for $15.0 million. Among 504 lenders, Empire State Certified Development Corporation placed 11 loans worth $16.2 million. Montgomery County leads with 63 loans, with Allegheny at 57 and Philadelphia at 53. After a dip to 24 loans in FY2020, volume recovered to 67 loans and $31.1 million in FY2025.

What has to be proven before the loan

At least 9.9% of Pennsylvania gym approvals dated FY2017 to FY2024 were cancelled, and 13.1% is the ceiling once undrawn loans are added. With a loss floor this high, a feasibility study for a Pennsylvania fitness center has to be conservative where it matters. It should measure demand within a short drive and list every club, studio and low-price chain competing for the same members, cost the build-out and equipment against the loan, and test debt service coverage under attrition and a slower ramp than the operator expects. A franchisee should see the brand's results for units in the region, not the system average. If the deal includes real estate, the appraisal will treat the building as general commercial space, and the study should show the loan can be serviced even if the club underperforms.

Fitness centers carry no special limitation in the coding, and each loan sits where the borrower's line of business was coded.