Medical Office Feasibility Study in Arizona

Physician practices weigh heavily in Arizona

Arizona lends to physician practices far more than its size in SBA lending would predict. The location quotient is 1.80x, the state ranks 7 of 53 among states, and medical offices rank 4 of 39 among Arizona's own classes by count. From FY2017 to FY2026 SBA approved 288 Arizona practice loans worth $208.5 million at a median of $395,500, or 1.16x what physician offices borrow nationally at the median. No metric here differs far from the class nationally, so the description rests on the size of the record and the outcome floors below.

Banks, development companies and Maricopa

SBA 7(a) carried 246 loans and SBA 504 carried 42. With 40 loans worth $30.1 million, Wells Fargo Bank National Association heads the Arizona 7(a) list, followed by JPMorgan Chase Bank, National Association with 23 and PNC Bank, National Association with 18; Newtek Bank, National Association has 14, as does The Huntington National Bank. The 504 work is split among Arizona Capital Source with 15, CDC Small Business Finance Corp. with 13 worth $17.9 million, and The Mortgage Capital Development Corporation with 12. Arizona practice loans have a middle half spanning $150,000 to $938,525. Franchise share is 1.4%. Maricopa County holds 215 approvals and Pima 31. FY2024 had the most loans, 38, and FY2026 the most dollars, $34.8 million.

Outcome floors

Cancellations took at least 12.3% of Arizona practice approvals dated FY2017 through FY2024, with a ceiling of 13.2%. Of the 131 Arizona practice loans in the earliest funded cohort, 2.3% show a charge-off at the floor, and 1.5% within five years.

A favourable record does not lower what a lender expects of the study. A feasibility study for an Arizona physician practice has to show patient demand in the service area by specialty, the payer mix and reimbursement the practice can expect, and the physicians and clinics already competing. Cost covers the build-out or building, equipment and the working capital needed while billing catches up with treatment. Debt service coverage should be built on each provider's realistic collections, with a case for a physician leaving. Where 504 finances a building, the appraisal will value medical office space and the rent or owner-occupancy income in the study must justify it.

SBA's files name the current holder of each Arizona loan, which is the lender shown; all rates are cohort floors.