SBA 7(a) Fitness Center Feasibility Study in Kentucky

Third in Kentucky, with a gap in the record

Fitness centers rank 3 of 39 among Kentucky's asset classes in SBA 7(a) records, a higher placement than the state's rank of 29 among states by loan count would suggest. The state logged 109 approvals worth $35.1 million. The median loan of $150,000 is 0.61x the gym loan typical across the country under 7(a); the middle half stretches from $53,100 to $350,000. Franchise-affiliated borrowers hold 39.4% of the loans.

The yearly series shows 15 loans in FY2017, 0 in FY2020, with $0 in dollars, and only 3 in FY2022, worth $499,500. Approvals then rose to 22 in FY2026, worth $6.4 million, the most of any year. A study should treat the recent pipeline as young, because the newest loans have not yet seasoned.

Holders and counties

In Kentucky, The Huntington National Bank holds 17 loans worth $3.7 million. Community Trust Bank, Inc. holds 11 worth $1.1 million, Stock Yards Bank & Trust Company has 10 loans, $4.1 million in all, while Republic Bank & Trust Company has 9 totalling $1.5 million. These figures reflect SBA's records of who holds each loan; they do not describe the standards of any holder. Jefferson County has 38 loans and Fayette County 20, which together carry most of the activity. Warren has 10, Kenton 6, and Boone and Madison 4 each.

Kentucky gym approvals through FY2024 show a cancellation floor of 6.8%, with the same ceiling. Among the 49 loans in Kentucky's early gym cohort, charge-offs stand at 4.1% or more so far, and 2.0% within five years. Neither number is final while Kentucky gym loans remain open.

What a Kentucky fitness study must test

Revenue per member and the number of members decide whether a club pays its debts, so the study should size the households within a short drive, price the competing clubs, and set a realistic pace for joining and for dropping out. Where the space is leased, the plan should show the lease term against the payback of the build-out. If the concept is a franchise, the fees and required equipment must be in the budget. Show payment coverage with slow enrolment, and say what the lender could recover from equipment that loses value quickly.