Dental Office Feasibility Study in Arizona

Arizona dental lending: steady and well represented

Dentistry is a mainstay of Arizona SBA lending. The class ranks 8 of 39 among Arizona asset classes, its location quotient of 1.15x puts it above its national weight, and 201 approvals from FY2017 to FY2026, worth $178.2 million, place Arizona 14 of 54 among states. At $569,000, the Arizona median dental loan is 1.12x the class median nationally, a modest premium. Our distinctness screen finds nothing in the typical Arizona loan size or in either outcome floor that sits apart, by our margin, from Arizona's record across all classes as well as from dental offices nationwide, so the cell reads as a sound, ordinary dental market with a few Arizona specifics worth knowing.

Practice loans, one lead lender and Maricopa

Arizona dental approvals in the middle half run from $231,200 to $1.2 million, the range of a practice purchase, a partner buy-in or a fit-out of new operatories. Almost all of it is 7(a), with 186 loans against 15 under SBA 504; the Arizona franchise share is 0.00%. Among lenders, Live Oak Banking Company holds 28 loans worth $46.9 million, far more dollars than Wells Fargo Bank National Association at 15 loans and $8.3 million, JPMorgan Chase Bank, National Association at 9, and The Huntington National Bank and First-Citizens Bank & Trust Company at 8 each. Arizona Capital Source and The Mortgage Capital Development Corporation lead the 504 side with 6 and 5. Maricopa County accounts for 146 approvals and Pima 28. After a quiet stretch of 12 loans in each of FY2022 and FY2023, Arizona recovered to 28 worth $29.4 million in FY2024.

Good outcomes, early losses

Arizona dental cancellations run to at least 5.9% of approvals dated FY2017 to FY2024, and 7.2% on the ceiling. Of the 95 Arizona dental loans disbursed in FY2017 to FY2021, 1.1% are charged off, the whole of it inside five years of approval. Floors as they are, these figures describe a class where approved Arizona deals close and few fail.

So a feasibility study for an Arizona dental office is mostly about the specific practice. For an acquisition, it has to test the patient base, collections and payer mix the seller reports, and whether the hygiene schedule and new-patient flow can carry a loan near $569,000. For a start-up or relocation, it must show the patient population per practicing dentist around the site, the cost of chairs, imaging and build-out, and a realistic ramp to debt service coverage. If the Arizona practice is buying its suite or building, the appraiser will value that real estate on its own, apart from goodwill.

No coding limitation is recorded for dental offices in our data; the Arizona counts follow the industry code carried on each SBA loan.