SBA 504 Fitness Center Feasibility Study

Gym owners who buy the building

Between FY2017 and FY2026 SBA's 504 program financed 916 fitness center projects, $1.03 billion of gross approvals, and the median loan is the number that marks this cell out. At $786,000, the 504 gym median sits far above the fitness median across both SBA programs, which the much smaller 7(a) gym loans set, and it also differs from the median the 504 program shows for all classes together. Half of the 504 fitness loans fall between $353,000 and $1.4 million.

Gym losses under 504

The outcome record is light on losses. Of the 346 gym loans that funded under 504 in FY2017 to FY2021, only 0.58% have been charged off, and 0.00% failed inside their first five years: what losses the cohort has seen came later. Cancellation reached at least 12.9% of fitness approvals from FY2017 to FY2024 and at most 16.1% if every undisbursed approval cancels. Franchised clubs account for 9.7% of the loans. Florida First Capital Finance Corporation, Inc. holds 50 gym loans worth $40.3 million, Empire State Certified Development Corporation 47 worth $54.3 million and Granite State Economic Development Corporation 41 worth $34.0 million; Capital Certified Development Corporation and Florida Business Development Corporation have 34 each. Texas leads with 78, ahead of California at 72, Florida at 69, Massachusetts at 49 and Illinois at 48. FY2025 brought the largest dollar total, $170.0 million on 109 loans.

Proving membership before the box

A feasibility study for an owner-occupied gym has to prove membership before it proves anything else. That means the households within a short drive, the competing big-box, budget and boutique clubs and their price points, the membership count needed to break even, and the attrition rate the operator has actually achieved. Cost covers the building or conversion, locker rooms, heating and cooling sized for a crowded floor, and equipment, which wears out on a shorter cycle than the 504 debt. Coverage on the bank and CDC payments together should hold through a membership ramp and a season of higher cancellations. The appraisal matters more than usual, so the study should show the value of the real estate without the gym in it.