SBA 7(a) Fitness Center Feasibility Study in Utah

Franchised gyms and a high charge-off floor

The 67 Utah fitness loans funded by FY2021 show a charge-off floor of 9.0% to date, falling to 4.5% when measured over the first five years only. Both are floors. Of the 191 loans approved from FY2017 to FY2026, which total $80.7 million in gross dollars, 48.7% carry a franchise flag. A $280,000 median is 1.14x the fitness median across the country, and half of the book lies between $100,000 and $494,850. Utah is 23rd by loan count, and fitness centers hold fourth place of 39 in Utah's classes.

Cancellations and the pace of approvals

For Utah gyms the cancelled share of approvals through FY2024 is 8.7% at the least, and 10.3% if never-disbursed loans are counted. Annual approvals stayed between 9 and 23 until FY2025 and FY2026, when they reached 36 and 29. The late surge means that much of the book has had little time to show losses, so the to-date floor may rise.

The lenders

The Huntington National Bank has 31 loans worth $10.8 million and Zions Bancorporation, National Association 22 worth $4.3 million, with Central Bank at 16 worth $7.0 million. Credit unions appear too: America First Federal Credit Union with 9 loans worth $3.3 million, and Mountain America FCU with 14 worth $2.2 million. Present holders only, with no claim about anyone's lending practice. Salt Lake County has 77 loans, Utah County 38, Davis 31 and Washington 15.

What a Utah gym study must test

Money from the loan could buy a fit-out, machines, a franchise or a club already open, and the study should be explicit. Membership is the first test: how many adults live nearby, which clubs and studios hold them already, and how fast members drift away. Competing franchises along the Wasatch Front should be mapped, together with the independent studios that hold local loyalty. Franchise terms for fees and equipment replacement belong in the cost line. Model dues and class income against rent and staff, with sign-ups building slowly, and show the payment still covered when membership falls short of plan. An appraisal rests on what the business earns, not on its equipment.