SBA 7(a) Fitness Center Feasibility Study in Illinois

Charge-offs arrive late in Illinois

Illinois fitness centers financed through SBA 7(a) number 392 loans and $164.4 million, FY2017 to FY2026. The charge-off floor deserves attention: 10.5% of the 171 loans in the FY2017 to FY2021 cohort are charged off to date, but only 3.5% fell inside the first five years after approval, so a large share of losses arrived after year five. Cancellation reached 12.3% at the least, and 13.3% when undisbursed loans are counted, across FY2017 to FY2024 approvals. All are floors.

Size, brands and rank

A median of $260,000 sits at 1.06x the figure for fitness loans nationally, close to parity, and the central half stretches $100,000 to $510,500. Franchise loans are 51.0% of the book, so about half the borrowers carry a brand. Fitness centers rank 3 of 39 among Illinois classes, and Illinois is 8 among states for the program.

Lenders and places

The Huntington National Bank has 84 loans worth $19.4 million, then JPMorgan Chase Bank, National Association with 26 worth $6.4 million, Byline Bank with 18 worth $20.6 million and U.S. Bank, National Association with 18 worth $4.4 million, while Wells Fargo Bank National Association trails at 9 loans and $7.1 million. These are the lenders SBA reports as current holders of the loans. Cook County has 171 loans, DuPage 53, Lake 43, Will 23 and Kane 22.

Years

Approvals fell from 53 in FY2017 to 28 in FY2021 and FY2022, and FY2025 reached 57 loans before FY2026 fell back to 35. Recent classes of loans are too young to show their charge-offs, so the charge-off floor above deserves weight when reading the newest approvals.

What an Illinois gym study tests

A gym study here has to separate the Chicago-area core from the rest of the state, test membership demand against competing clubs and boutique studios, and model attrition, with the central half of loans from $100,000 to $510,500 as the reference range for project size. The charge-off pattern argues for a plan that survives past the fifth year: equipment replacement reserves, a lease that outlasts the loan and a member base that does not depend on a launch promotion. If the brand is franchised, the model should include the royalty, and the appraisal should treat equipment as limited collateral.