Behavioral Health Feasibility Study in Utah

A state that finances behavioral health heavily

Utah stands out because both the volume and the ticket size are unusual. SBA backed 65 behavioral health and addiction treatment loans in the state between FY2017 and FY2026, representing $69.9 million. The location quotient of 2.83x puts the class well above its national share, and the state ranks 5 of 52 nationally even though the asset places only 16 of 39 within Utah. The median is the distinctive metric: $500,000 is 1.67x the national median, while loans in the middle of the distribution reach from $273,000 up to $1.4 million, large enough to cover a purchased or built facility rather than a leased suite.

A 504-heavy program mix

SBA 504 made 28 loans against 37 under 7(a), a much stronger 504 share than most health service classes show, which fits facility ownership. No franchise brands appear, at 0.00%. Mountain West Small Business Finance leads with 19 loans worth $11.5 million, and Intermountain Business Lending, Inc. adds 8 worth $7.5 million. For 7(a), the leading lender is a division of a Colorado bank, with 9 loans worth $10.0 million. Salt Lake County holds 27 loans, Utah County 12, Wasatch County 6 and Washington County 5.

Uneven years

Volume tracks projects more than trends. FY2018 recorded 9 loans worth $12.6 million, FY2021 had 10 worth $17.5 million, and FY2026 shows 8 worth $16.4 million. In between come thin years such as FY2020, with 3 loans and $1.2 million, and FY2023, with 3 loans and $939,700. A lender should expect lumpy origination.

Withdrawals and the missing loss rate

Withdrawals before funding claimed at least 6.0% of approvals from FY2017 to FY2024, and 8.0% if loans still unfunded are counted as dropped. A charge-off rate is deliberately omitted because fewer than 30 loans in the early disbursed cohort support it. The omission is not a clean bill of health, and addiction treatment in particular can take years to show stress.

What the study must establish

A study for a treatment facility has to start with licensing, since state licence conditions, bed or slot counts and certificate requirements decide what can be built. Demand testing should use referral channels, payer mix and the share of patients whose coverage pays for a full course of care. Cost must be tested against a ticket near $500,000, including renovation to clinical standards. Coverage of debt service should include a ramp period with partial census and a payer-denial case, and the appraisal will value a special-purpose building conservatively. Both industry codes cover mental health and substance treatment together, so a project cannot be read against only one of those two competitor topics here.