Dental Office Feasibility Study in the Indianapolis-Carmel-Greenwood, IN Metro Area

A larger dental ticket than the nation, with a thinner share

Indianapolis-Carmel-Greenwood approved 61 dental office loans worth $41.6 million from FY2017 to FY2026. Dentists are not over-represented here: the location quotient is 0.76x, below the national share, and dentistry takes the ninth spot, 9 of 39, in a metro that sits 31 of 562 for dental loans. The median loan of $345,500 is 0.68x the national median, so a typical Indianapolis dental loan falls well under the national figure.

Who holds the loans

The middle half of the loans begins at $95,000 and ends at $815,000, a wide spread. The program mix is 54 loans for 7(a) and 7 for 504, and no loan is marked as a franchise (0.00%). 24 7(a) loans, worth $16.3 million, are logged against The Huntington National Bank worth $16.3 million, a concentration that dwarfs the rest; Live Oak Banking Company shows 5 loans worth $10.5 million, so its average loan is much larger. The dollar figures are SBA's holder records and say nothing about either lender's standards. Marion County has 26 loans, Hamilton County 12, Boone County 6 and Hancock County 5.

The counts that can be shown: 7 loans in FY2018 ($6.7 million), 8 in FY2019 ($6.0 million), a high of 15 in FY2021 ($8.5 million) and 7 in FY2022 ($5.4 million). FY2017, FY2020 and FY2023 through FY2026 stay unprinted for want of enough loans, which is not the same as none. A cancellation floor is published: a dozen-percent mark is the best that can be said: 12.0% of approvals in the FY2017 to FY2024 cohort fell through. The harsher cancellation variant that adds undisbursed loans is withheld, and the charge-off rate is absent altogether. Open loans can still change the picture, so a borrower or lender should treat the one published figure as a minimum, not a forecast.

What to test for a dental practice loan here

Because the typical ticket is lower than elsewhere and the practice mix is mostly independent, a study should start from the practice itself: the provider's production history, the payer mix, hygiene capacity and the number of operatories the premises will hold. Then it should price the fit-out and the chairs, and demonstrate coverage of debt service on a cautious patient ramp, particularly for an acquisition where goodwill is part of the price. The appraisal will test that value, so the study should explain what supports it. Indianapolis history gives context for size and lenders; it does not predict any outcome.