SBA 7(a) Fitness Center Feasibility Study in Montana

Ranked fourth in the state, near the bottom nationally

Fitness centers rank 4 of 39 among Montana's SBA 7(a) asset classes, an unusually high place, while the state is 40 among states by number of fitness loans. The pair says that a small state leans on gyms and studios more than most. SBA approved 44 loans between FY2017 and FY2026 with $20.0 million in gross dollars. The median loan, $231,100, is 0.94x the national figure, and the middle half falls from $72,500 to $556,875, so the typical project is a leased space with equipment. Franchise affiliation is much higher than for most classes, at 31.8% of loans.

The Montana lenders

The Yellowstone Bank holds 12 loans worth $6.2 million, Glacier Bank carries 8 with $3.4 million, and Montana Community Development Corp., 5 with just $511,900. The last has a small average, which suggests micro-sized loans. Treat these as holdings in SBA's records, never as statements of policy. By county, Yellowstone has 14 loans, Gallatin 11 and Missoula 9, with Lewis and Clark at 4, Cascade and Jefferson at 2, and Fergus and Ravalli at 1. The leading counties therefore account for the bulk of the loans, and a project in the rest of the state would be an outlier against this record.

Uneven years and cancellations

FY2017 and FY2024 each had 8 loans, at $2.9 million and $1.8 million. FY2020 and FY2021 had only 1 loan each, at $245,000 and $540,000, while FY2022 had 3 loans yet $6.7 million, a sign of one very large deal. Montana approvals made up to FY2024 show cancellations of at least 14.7%, high beside many classes, with the ceiling equal at 14.7%. Loss data are not printed because the earliest loans that funded are too few to support a rate, which means withheld and not zero.

What a Montana fitness study must show

A study begins with population within a short drive, which in Montana may mean a whole county, and with seasonal patterns, since winter pushes members indoors while summer pulls them outdoors. It should compare the concept with existing gyms, climbing facilities and recreation centers, and build revenue from member counts, retention and pricing. Where a franchise brand is involved, its fee structure and required equipment should be shown in the cost base. Payroll for instructors is the largest cost, so scheduling should be shown. The payment must hold through a slow membership ramp, and the lease term should line up with the loan term, because a gym that loses its space loses its business.