Behavioral Health Feasibility Study in California

First in volume, and far above the class on size

California approved more SBA loans for behavioral health and addiction treatment than any other state: 158 from FY2017 to FY2026, worth $167.8 million, a rank of 1 of 52. Volume is not what sets the cell apart, though. Loan size is. The California median of $648,350 is 2.16x the national median for these providers, and it passes our distinctness margin when set beside treatment providers nationally and beside California's own all-class record. With a location quotient of 1.04x and a place of 21 of 39 among California asset classes, the state does not over-lend to treatment providers; it lends them more per deal.

Property, programs and a spread of lenders

The middle half of California treatment loans sits between $250,000 and $1.5 million. SBA 504 carried 34 loans against 124 under 7(a), so a share of borrowers financed property. Franchising is absent at 0.00%. No lender dominates. Wells Fargo Bank National Association leads 7(a) with 13 loans worth $6.3 million, U.S. Bank, National Association follows with 11 worth $8.4 million, then Northeast Bank with 7, The Huntington National Bank with 6 and Enterprise Bank & Trust with 5 worth $5.6 million. For California's 504 loans, The Mortgage Capital Development Corporation has 7 worth $10.0 million and CDC Small Business Finance Corp. has 6, while Business Finance Capital and California Statewide Certified Development Corporation have 5 apiece. Los Angeles County alone holds 62 approvals, Orange 32 and San Diego 17. Activity stepped up late, with 24 approvals in FY2024, 27 in FY2025 and 21 worth $26.9 million in FY2026.

Cancellation and loss floors

Cancellation took at least 13.6% of California treatment approvals made over FY2017 to FY2024; treating every undisbursed loan as lost lifts that to a ceiling of 15.5%. Among 51 loans funded from FY2017 through FY2021, 2.0% are charged off, every bit of it inside five years of approval. Those are floors, and the charge-offs that did occur came inside the first five years.

A feasibility study for a California behavioral health or addiction treatment facility therefore has to establish referral and payer demand in the county it will serve, including how much of the census will rest on commercial insurance, public programs or private pay. It must cost licensing, clinical staffing and any residential conversion against a ticket near $648,350 or higher, and prove that debt service is covered across the first five years, when the recorded charge-offs happened. If the loan buys real estate, the appraisal has to value the building for its licensed use and for an alternative one, and the study should ask how readily a specialised treatment facility could be resold.

Behavioral health and addiction treatment cannot be told apart in these figures: the two share both of their industry codes, so a California outpatient counselling practice and a residential recovery program sit in the same count.