SBA 7(a) Fitness Center Feasibility Study in Wisconsin

Wisconsin gyms: smaller loans, mixed franchising

Fitness centers rank fourth among Wisconsin's 39 classes, and Wisconsin sits 20 among states under 7(a), with 215 approvals across FY2017 to FY2026 worth $76.3 million. The ticket sits well below the national pattern: a median of $160,000 is 0.65x the nationwide 7(a) benchmark, while a mid-range ticket runs $60,000 to $433,500. Franchised units account for 44.2% of loans, a large minority, so the typical Wisconsin borrower is just as likely to run an independent studio as to join a chain.

A community lender among the leaders

The Huntington National Bank has 20 loans worth $6.9 million, but second place goes to a community lender, Wisconsin Women's Business Initiative Corporation, with 15 loans worth $2.3 million. Summit CU holds 13 worth $737,500, and Byline Bank (10 loans, $9.0 million) and Nicolet National Bank (8, $2.7 million) close out the list. Byline's dollars per loan are exceptional beside Summit's. The names come from SBA's holder field and do not describe policy. Dane County has 47 loans, Waukesha 33, Milwaukee 23, Outagamie 15, La Crosse 13, Racine and Saint Croix 11 each, Brown 10, Ozaukee 8 and Winnebago 7.

Outcomes

Cancellation reaches at least 11.0% of approvals through FY2024, or 11.6% with the undisbursed treated as lost. Charge-offs on the 95 early-cohort loans are at a floor of 4.2% to date and 1.1% at five years. The long gap between the two suggests losses arrive late, so the first number may keep climbing.

The Wisconsin fitness file

Membership retention through a long winter is the central question: indoor exercise demand can rise when the weather turns, but a study must still show it with local evidence. Count the competing gyms and low-cost chains, and test the monthly membership level needed to cover rent, payroll, equipment leases and debt service. Compare the fit-out with a ticket near $160,000, and where a franchise is involved, read its required investment and fees closely. Run coverage with membership well under target. An appraisal will lean on business value and the lease, because equipment resells poorly.

Dane and Waukesha counties lead the geography, and the community lender in second place shows that smaller institutions finance studios here. A borrower with a smaller request should ask whether such a lender fits the project before assuming a large bank is the only route, and a study should record that conversation.