SBA 504 Fitness Center Feasibility Study in California

California fitness centers on the 504 program

California holds second place among states for SBA 504 fitness center loans, although fitness centers rank only 13 of 39 among the state's lending classes. SBA approved 72 loans from FY2017 to FY2026, totalling $105.8 million. The median loan of $1.2 million is 1.51x the national 504 median, and the central half starts at $385,750 and goes to $2.2 million, a very wide spread. Franchised clubs are 13.9% of loans. The charge-off rate for California fitness is not printed, since Loan Analytics holds back any rate on a cohort under 30 loans; the blank is neither a zero nor a number.

Development companies and the county map

The Mortgage Capital Development Corporation holds 14 loans for $30.0 million. Eight loans each belong to Business Finance Capital ($9.3 million) and CDC Small Business Finance Corp. ($7.7 million), while California Statewide Certified Development Corporation ($14.8 million) and Greater Sacramento Certified Development Corporation ($12.5 million) hold 7 apiece, with larger notes. The rows record the present holders of the loans. Los Angeles County has 11 loans and Placer 5, with Alameda, Butte, Fresno, Riverside, San Bernardino and San Francisco at 4 each, so the lending reaches many different counties. Annual dollars rose from $1.5 million in FY2018 to $18.6 million in FY2025 and $21.6 million in FY2026, a full year ending 2026-09-30.

Cancellation

Cancellation is at least 12.8% and as much as 19.1% if undisbursed loans are counted. Closing readiness is part of the case.

Testing a California fitness project

Because the band is wide, the first job is to define the format: a boutique studio, a big-box gym, a specialty club with pools or courts, or an owned building leased to an operator. Membership demand depends on population and income within a short drive, on competing clubs and on the pricing tier, and the study should model joining and churn. Revenue per member and the mix of dues, personal training and ancillary income should be shown with a ramp from opening. Build costs for locker rooms, ventilation, flooring and equipment are significant and should be listed separately from land and shell. The payment must be covered if enrollment lags plan, and a franchise, where proposed, adds fees that belong in the budget. With a high ceiling on cancellation, evidence of site control, zoning and permits strengthens the proposal. An appraisal should value the building as well as the business.