SBA 7(a) Fitness Center Feasibility Study in Maryland

A high-loss, franchise-minded gym market

Maryland fitness centers under SBA 7(a) are a modest lending niche, and the cell holds 210 loans for $70.2 million gross between FY2017 and FY2026. Nothing was flagged as distinctive in this cell, but the loss figures are among the weightier numbers on this site. Of 87 loans funded in FY2017 to FY2021, 11.5% are charged off today, and 6.9% were charged off by the fifth year. Cancellations take at least 16.8% of the FY2017 to FY2024 approvals, and 18.7% at most. Maryland ranks 21 nationally, and fitness ranks 4 of 39 in the Maryland class order. The $149,500 median is 0.61x the national fitness benchmark, with typical loans from $30,900 to $350,000. Franchise brands hold 34.8%.

One bank, then a long tail

Manufacturers and Traders Trust Company alone holds 105 loans and $18.4 million, half of the cell, while each of Citizens Bank ($2.9 million), Truist Bank ($2.1 million), The Huntington National Bank ($1.3 million) and PNC Bank, National Association ($266,500) holds 6. SBA lists the holder of each loan, which tells us who has the paper, not how the bank lends. Baltimore County has 37 loans and Montgomery 34, Frederick and Harford 22 each, Anne Arundel 19, Howard 17, Prince Georges 14, Carroll 13, Baltimore City 11 and Washington 6. Gyms are a suburban product in Maryland, with the city well behind its surrounding counties. Approvals fell from 31 in FY2018 to 8 in FY2022, then recovered to 28 in FY2026.

What a Maryland fitness study has to test

Start with membership economics: price points, expected sign-ups per month, how many leave, and what share of members use the club at peak times. Maryland's suburbs offer dense households and commuting patterns that move gym traffic, so the study should draw the trade area by drive time, name competing clubs, studios and municipal centers, and test parking and visibility. With a third of loans going to franchised units, a branded concept needs its fees, required equipment and territory terms modelled. Leased space and fit-out of around $149,500 differ from a purchased building, and the study should name which. Given the charge-off numbers, show coverage under a ramp slower than the brand projects, and a downside with members lost. Lease length and landlord support are part of repayment, and an appraiser will value the business.