Dental Office Feasibility Study in Massachusetts

Smaller Massachusetts loans, more cancellations

Massachusetts dental loans differ from the class on size and on cancellation, and both set the cell apart from Massachusetts lending in general and from dental offices nationally. They are smaller: the median of $350,000 is 0.69x the dental median nationally. And they are cancelled more often: at least 18.1% of Massachusetts dental approvals from FY2017 to FY2024 were cancelled once approved. The ceiling is the same 18.1%, since nothing in the cohort waits on disbursement. The volume is solid, 212 approvals worth $136.2 million from FY2017 to FY2026, ranking 12 of 54 among states, and dentistry places 8 of 39 among Massachusetts asset classes, though the location quotient of 0.84x leaves it below its national weight.

Two tiers of Massachusetts lender

The lender table shows a split market. Live Oak Banking Company holds 42 loans worth $62.4 million, while Eastern Bank's 29 loans total $3.8 million and TD Bank, National Association's 10 total $1.8 million. Salem Five Cents Savings Bank has 8 and Citizens Bank, National Association 7. SBA 504 carries 39 loans against 173 under 7(a): Bay Colony Development Corporation has 18 worth $9.3 million, Granite State Economic Development Corporation 13 and New England Certified Development Corporation 5. The central half of Massachusetts dental approvals sits between $100,000 and $812,500, and franchising is near zero at 0.47%. Middlesex County leads with 47 approvals, Essex has 39, Norfolk and Worcester 26 each. Lending fell to 8 loans in FY2022 and 10 in FY2023, then returned to 21 in FY2024.

Loss record

Charge-offs are rare: 0.87% of the 115 Massachusetts dental loans funded over FY2017 to FY2021, every one of them inside the first five years after approval. That is a floor, but it is small beside the cancellation floor.

For a borrower, the cancellation floor argues for a feasibility study done before the commitment, not after. It should confirm the practice's collections, payer mix and patient retention for an acquisition, or demand per dentist and competing practices for a new office, and test whether the lease, the equipment budget and the seller's terms hold up against a loan near $350,000 or a larger purchase. Debt service coverage needs to be shown on the practice's own production, and where Bay Colony Development Corporation or another development company finances the building, the appraisal has to carry that property on its real estate value alone.

The dental class carries no coding limitation; Massachusetts figures follow the industry code on each loan record.