SBA 7(a) Fitness Center Feasibility Study in Virginia

Virginia fitness: franchised, and uneven in its losses

More than half of Virginia's fitness centre loans under 7(a) went to franchised units: the share is 53.7%. The file for FY2017 to FY2026 holds 283 loans worth $120.7 million. The median is $294,400, which is 1.20x the typical fitness loan nationally, and the central half runs from $82,000 to $506,000. Virginia ranks seventeenth among states by count, while Virginia's class ranking puts fitness in third place. The brand-heavy mix means a typical borrower is a franchisee following a system's build-out standard.

Two ways loans end badly

Of FY2017 to FY2024 approvals, at least 14.6% lapsed, and 16.0% if loans awaiting disbursement are included, so a good many approvals did not fund. In the cohort of 110 disbursed loans, 9.1% are charged off to date and 4.5% went inside five years. Each reading is a minimum. The widening between the five-year and the to-date figure says that trouble builds after the first years, perhaps as memberships age.

Northern Virginia and the coast

Fairfax County has 53 loans and Loudoun 31, with Virginia Beach City at 24, Prince William at 21 and Arlington at 18. Chesterfield and Henrico have 11 each, Alexandria City 10, and Chesapeake City and Newport News City 8 each. The record splits between the Washington suburbs and Hampton Roads, with Richmond's counties a smaller third. Approvals dropped to 11 in FY2021 and 13 in FY2022, then returned to 38 in FY2023 and 39 in FY2026.

Lenders

Manufacturers and Traders Trust Company has 43 loans and $10.2 million, The Huntington National Bank 36 and $8.8 million, Wells Fargo Bank National Association 19 and $10.0 million, Stearns Bank National Association 16 and $3.1 million and Live Oak Banking Company 13 and $7.8 million. These columns show portfolios on each lender's books, and cannot show anyone's credit standards.

What a Virginia gym study has to test

The central test is whether the trade area can supply enough members to cover fixed costs, given the franchisor's own minimum. The study should map competitors, including budget chains and boutique studios, and set dues against local income. Join fees and churn, equipment replacement and the build-out standard the franchisor requires belong in the model, along with royalties and the advertising fund. Northern Virginia rents are high and the lease term matters. A loan near $294,400 funds a typical fit-out, while a request toward $506,000 must be justified. Debt payments should be covered with membership well below the franchisor's mature average.