SBA 7(a) Fitness Center Feasibility Study in Michigan

Franchise-heavy and modest in size

Fitness centers in Michigan use SBA 7(a) for smaller loans than fitness centers elsewhere, and that is the distinctive measure here. At $150,000 the median is 0.61x the national fitness figure, and typical loans span $50,000 to $350,000. Over FY2017 to FY2026, 321 loans were recorded, $99.8 million gross, ranking Michigan 14 among states and placing fitness 5 of 39 among Michigan's classes. Franchise brands make up 45.8% of the loans, so many of these borrowers are opening a gym under a known name, and small-format studios are a likely part of the mix.

A single bank dominates

Huntington National Bank holds 162 of the loans, worth $24.7 million, about half of the cell. Fifth Third Bank holds 12 for $8.0 million, Live Oak Banking Company 10, $5.2 million, Horizon Bank 8 for $3.2 million and Stearns Bank National Association 8 for $2.3 million. The source is SBA's holder field, so these are statements about loans on the books, not about policy. Oakland County has 87 loans, Kent 44, Wayne 42, Macomb 17, Ingham, Kalamazoo and Ottawa 15 each, Genesee 13, Monroe 9 and Livingston 7. Approvals fell from 43 in FY2019 to 18 in FY2021, and recovered to 41 in FY2024.

After approval

Cancellations are at least 11.1% of approvals from FY2017 to FY2024 and could reach 13.8%. Among 143 loans funded in FY2017 to FY2021, 7.0% show as charged off to date and 3.5% were charged off within five years. They are minimums; open loans could still fail. The dip in 2020 and 2021 is a reminder that gym lending is sensitive to closures, though the data here do not attribute any cause.

What a Michigan fitness center study has to test

Membership businesses live on retention, so the study should model sign-ups, cancellations and the monthly price, and show how many members the space can serve at peak hours. Count households and workers within a short drive, competing gyms, studios and recreation centers, and the parking and visibility of the site. With so many franchise loans, the fee schedule, the required equipment list and the territory terms belong in the model. A median of $150,000 indicates build-out of leased space is typical, so lease length and landlord contributions matter. Michigan winters raise indoor demand but can slow openings. Debt service must be covered on a membership ramp slower than the brand's own projections, and an appraiser will treat the business, not the building, as the main value.