SBA 7(a) Fitness Center Feasibility Study in Alabama

Gyms in Alabama: franchised, above the norm, and two counties deep

Alabama's fitness center loans are concentrated, branded and a little larger than elsewhere. The 7(a) file holds 83 loans for FY2017 to FY2026 and $32.0 million in gross dollars, and franchise flags sit on 41.0% of loans, so a studio brand is part of the plan for a large share of borrowers. The median of $284,800 is 1.16x the national median for fitness centers, with half of all loans between $141,650 and $417,000. In the national count Alabama is 35th, but within the state the class is 4 of 39 among financed industries.

Jefferson and Madison dominate

Two counties account for most of the record: Jefferson, around Birmingham, with 23 loans, and Madison, around Huntsville, with 18. Baldwin follows with 8, Montgomery with 5 and Lee with 4. On the lender side the table is short. The Huntington National Bank holds 12 loans, while Peoples Bank of Alabama and Wells Fargo Bank National Association hold 5 each, all as present holders in SBA's data. Lending was strongest early and late, with 10 loans and $7.1 million in FY2017, a low of 4 in FY2021, and 16 loans worth $5.6 million in FY2025.

A charge-off pattern that reverses

Across FY2017 to FY2024, Alabama saw 9.1% or more of its gym approvals cancelled, and the ceiling is the same figure. In the seasoned Alabama group of 35 gym loans, the charge-off floor is 11.4% to date, yet 0.00% within five years of approval. That reading means every loss in the group arrived after the fifth year. It is a floor, based on 35 loans and any loan not yet repaid may push it up.

What an Alabama fitness study has to test

For an Alabama gym the study must count members, not square feet: how many households live within a short drive, at what income, and how many competing gyms and studios already take their money. Membership churn is the largest unknown, so the study should show how long a typical member stays and what happens to revenue if retention falls. With 41.0% of loans franchised, the brand's royalty, equipment package and territory rules must be in cash flow. The loan sizes point to leased space with equipment, so lease length and renewal terms matter, because a gym with a short lease has little to fall back on. Coverage of the payment should survive a year of slower sign-ups, and the valuation should treat equipment at its resale value. The coding for this cell has no recorded limitation.