SBA 7(a) Fitness Center Feasibility Study in South Carolina

Charge-offs set South Carolina gyms apart

The number that distinguishes fitness centers financed under SBA 7(a) in South Carolina is not their size but their losses. Of the 52 loans in South Carolina's early gym cohort, at least 25.0% have been charged off to date, and 11.5% of them were gone within five years of approval. Both stand as minimums, so the true figures can only be higher. For a lender weighing a gym loan in this state, that is the first thing the record says, and it is why a study here should spend more of its effort on downside cases than a study for a steadier class would.

South Carolina logged 144 fitness center approvals across FY2017 to FY2026, totalling $71.0 million. The state ranks 25 among states for the program's fitness loans by count, yet the class stands at 4 of 39 inside South Carolina itself, so gyms matter more to the state's own SBA lending than to the national picture. The median loan of $320,000 is 1.30x the national 7(a) figure for fitness centers, and half of the loans fall between $100,375 and $580,000. Franchise-affiliated borrowers make up 52.8% of loans, a majority, so a study must say whether the concept is a branded studio or an independent club.

Lenders and places

SBA lists a current holder for each loan. The Huntington National Bank holds 22, worth $5.4 million; Wells Fargo Bank National Association holds 14, worth $4.1 million; TD Bank, National Association holds 11, worth $2.8 million. Pinnacle Bank and Live Oak Banking Company hold 7 apiece, yet Pinnacle's come to $10.1 million against $3.9 million for Live Oak, which points to larger individual loans at Pinnacle. These are holdings in SBA's files and say nothing about any bank's standards. Charleston County leads with 28 loans, then Greenville with 23, Horry with 18, and York and Beaufort with 11 and 10. Approvals fell to 4 in FY2021, then recovered to 26 in FY2025.

Among South Carolina gym approvals made by FY2024, cancellation had a floor of 11.2%; counting loans still awaiting disbursement leaves the ceiling at the same 11.2%, so those add nothing to the count.

Tests a South Carolina gym project must pass

Membership economics decide whether these loans work. A study should estimate the households inside a realistic drive time, the price points of competing clubs and boutique studios, and the churn that every membership model absorbs, then show how many members the project needs to cover its debt payment. Equipment and build-out are the main costs, and equipment loses value quickly, so the study should show what a lender could recover if the club closes. With charge-offs this prominent, include a case in which membership ramps slowly and a case in which a larger competitor opens nearby. Seasonality on the coast, where Horry and Beaufort sit, deserves its own line in the forecast.