Fitness Center Feasibility Study in the San Diego-Chula Vista-Carlsbad, CA Metro Area

Every loan here is a 7(a)

San Diego-Chula Vista-Carlsbad has a fitness center file with no 504 side at all: all 152 loans are SBA 7(a), with 0 loans under SBA 504. The area is just San Diego County, and its 152 approvals between FY2017 and FY2026 carry $58.4 million in gross dollars. San Diego stands 20th of 608 areas for gym loans, and fitness is fourth of 39 classes in the area. With a location quotient of 1.01x gyms hold almost exactly their national share, and a $250,000 median sits at 0.96x the national figure; half of loans range from $118,000 to $423,000.

Nearly half of the loans, 47.4%, carry a franchise flag, so branded gyms are a large part of the borrower pool. With no 504 loans, the file is about leasehold fit-outs, equipment and working capital, not about owned buildings, and a study here seldom has a real estate appraisal at its center.

Lenders and what they hold

SBA's lender list names the present holder of each loan. The Huntington National Bank holds 28, worth $7.3 million. CDC Small Business Finance Corp. appears next with 21 loans worth $4.4 million, and, at 11 loans each, come Newtek Bank, National Association ($2.6 million) and Wells Fargo Bank National Association ($3.3 million). Simmons Bank holds 8 worth $2.5 million. The page records holdings only and passes no judgment on any holder.

Cancellation among San Diego gym approvals (FY2017 through FY2024) reached 12.5% or more. Held back on thin loan counts are the cancellation ceiling, the charge-off rate so far, and both FY2020 and FY2021 in the yearly record; the page prints no number for them and none of them is zero. The visible years run from 16 loans in FY2017 to 21 in FY2019, then 13 in FY2022, 11 in FY2023 and 26 in FY2025, worth $6.6 million.

What a San Diego gym study has to test

Memberships and retention drive the model, so the study should project sign-ups by month, the fraction that cancel, and the point at which paying members cover rent, payroll and the monthly loan payment. Trade areas in a county of beaches, bases and inland suburbs differ sharply in income and age, so the site should be tested against the households within a short drive and against the gyms and studios already operating there. If the loan finances a franchise, its fees and remodel schedule belong in the cash flow. Equipment depreciates quickly, so the appraisal assigns modest value to it. Totals here err low: a San Diego loan reaches the area only if its county is on the July 2023 list.