SBA 7(a) Fitness Center Feasibility Study in Georgia

Franchised gyms, with real losses

Georgia fitness lending under SBA 7(a) is dominated by franchises: 63.1% of the 352 loans approved from FY2017 to FY2026 carry the flag. Together they come to $195.8 million in gross dollars. The state is tenth for the program by loan count, and fitness centers hold seventh place on Georgia's list of 39 asset classes. A median loan of $350,000 is 1.42x what fitness borrowers take at the median across the country, and the central half of the book spans $150,000 to $561,600. In short, Georgia gyms borrow more than most and are mostly branded.

The loss record

Looking at the 138 loans funded by FY2021, charge-offs total 7.2% to date and 5.1% by the five-year mark. Cancellations after approval reached at least 12.4% of FY2017 to FY2024 approvals, or 13.6% once loans that never received funds are added. All of these are minimums, because open loans can still sour. A bank should see a class with a visible loss floor, and a borrower should see that a franchise name has not protected earlier owners.

Bankers and counties

The Huntington National Bank dominates the table with 64 loans worth $26.3 million, and Citizens Bank has 17 worth $13.7 million. Stearns Bank National Association has 17 worth $3.9 million, Wells Fargo Bank National Association has 16 worth $6.2 million, and Live Oak Banking Company has 12 worth $11.3 million. The table reports the current holder of each loan; it is not a description of anyone's credit rules. Fulton County has 85 loans, Cobb 49, DeKalb 32 and Gwinnett 27, with Cherokee next at 14. Annual approvals rose to 49 in FY2025 and 45 in FY2026, up from 20 in FY2020.

Questions for a Georgia fitness study

Since 7(a) is a broad guarantee, the study begins by naming the use: lease build-out, equipment, a franchise fee or the purchase of an existing club. Membership is the engine, so the study should count adults within a short drive of the site in metro Atlanta or the smaller markets, list the clubs and boutique studios already there, and estimate how quickly members will leave. Franchise agreements carry fees and equipment replacement schedules that belong in the cost line. Test the payment against slow sign-ups and a share of members cancelling in the first year. The appraisal rests on earnings, not on equipment.