SBA 7(a) Fitness Center Feasibility Study in Tennessee

Light cancellations, bigger-than-usual gym loans

Tennessee fitness lending shows two distinctive measures. The $348,500 median is 1.42x what gyms nationally take at the 7(a) median, and the cancellation floor is only 6.0% of approvals through FY2024, or 8.1% once undisbursed loans are counted. The program approved 202 Tennessee gym loans between FY2017 and FY2026, worth $93.8 million, ranking the state 22 among states, with fitness at 3 of 39 among Tennessee asset classes. Franchise brands took 62.4% of the loans, and the middle band of tickets reaches from $150,000 to $531,575.

Charge-offs still bite

Low cancellation does not mean low loss. Of the 76 funded Tennessee gym loans in that cohort, the floor on charge-offs so far is 6.6%, and the charge-off figure counted at five years is 3.9%. Open loans may add to either number. Annual approvals ran at 26 in FY2018, fell to 8 in FY2020, and have risen to 30 loans worth $12.1 million in FY2025, with 23 loans and $13.5 million so far in FY2026. A franchise-dominated, rising market of this kind invites more units into the same trade areas, which the study must weigh.

Lenders and the Tennessee map

Leading the lender table is The Huntington National Bank with 37 loans worth $9.2 million. Pinnacle Bank has 20 loans worth $15.5 million, a larger dollar total on fewer loans; U.S. Bank, National Association has 12 loans, Old National Bank 10, and Citizens Bank only 7. SBA lists whoever holds each loan today, and that tells nothing of any institution's standards. Davidson County has 54 loans, Shelby 26, Williamson 22, Hamilton 19 and Knox 13, a spread that follows Nashville, Memphis, Chattanooga and Knoxville.

Planning a Tennessee gym

A feasibility study should size the membership pool in a car-oriented market where drive times matter, then count rival clubs, from budget chains to boutique studios, and test pricing against local incomes. Franchise terms deserve scrutiny, since royalties and mandated equipment change the break-even point. Retention is the main driver, so the study should show membership additions and cancellations by month, with a slow first year. Rent, build-out and the equipment package must fit a loan near $348,500, and the lease term must let the sponsor recover leasehold work. Debt service coverage should hold if enrolment lags, and the appraisal rests on documented earnings, not hopes.