Behavioral Health Feasibility Study in Arizona

A class Arizona uses far more than the nation does

Behavioral health and addiction treatment is unusually prominent in Arizona. The location quotient is 2.48x, so the class commands a much heavier slice of Arizona lending than it does nationally, and the state ranks 6 of 52 for loans even though the class is only 17 of 39 within Arizona. Between FY2017 and FY2026 there were 61 loans and $57.7 million. The distinctive metric is the size of the loan: the median is $548,000, or 1.83x what the nation typically lends, and the heart of the range runs from $250,000 to $1.3 million. Arizona programs borrow much more per project than counterparts elsewhere, which points to residential facilities and acquisitions.

Lenders, programs and the Phoenix concentration

The program split is 48 loans under SBA 7(a) and 13 under SBA 504, a real estate share higher than usual for this class. No loan carries a franchise flag. Arizona Capital Source leads the certified development company list with 10 loans and $11.1 million. In 7(a), America First Federal Credit Union holds 7 loans worth $14.2 million, an average ticket well above its peers, and BNC National Bank holds 5 worth $2.3 million. Maricopa County accounts for 49 loans, with Pinal at 7, Pima at 3 and Yavapai at 2, so the lending is overwhelmingly a Phoenix metro story.

Mixed codes and the cancellation range

Both industry codes are shared by behavioral health and addiction treatment, so the count blends mental health practices with substance use programs. Cancellation has a floor of 5.0% for approvals through FY2024 and an upper bound of 10.0% if undisbursed loans are counted, a wide gap that shows how many approvals were still waiting on funds. Loss experience cannot be quoted: under 30 loans fall in the disbursed FY2017 to FY2021 group, so no number is given and none should be inferred as zero.

What a feasibility study has to establish here

With tickets this large, the study carries real weight. It must show demand beyond what existing Arizona facilities already serve, and it should establish the payer mix, including state Medicaid participation, because reimbursement drives the census economics. Licensing, zoning approval for a residential use and staffing ratios affect timing and cost. Coverage of debt payments has to hold at a cautious occupancy even if licensure arrives late. Valuation of a special-purpose property turns on whether a second operator could take it over. Loan Analytics prints the approved-loan record for lenders and borrowers to test a proposal against.