Medical Office Feasibility Study in the Chicago-Naperville-Elgin, IL-IN Metro Area

A physicians' market lighter than the country's

Medical offices for physicians are a modest line of business in Chicago-Naperville-Elgin's SBA book. The location quotient is only 0.66x, so the class weighs less here than in the national book. Locally it holds just 12 of 39, and the $283,500 median is 0.83x the class's national median. Even so the area stands 10 of 488 across the country. SBA approved 159 loans between FY2017 and FY2026, worth $83.6 million, with the middle of the distribution reaching from $150,000 to $607,600.

Cook County and the collar

Cook County, IL, holds 96 of the loans; DuPage has 20, Lake in Illinois 15, Will and Lake in Indiana 7 each and McHenry 5. SBA 7(a) carries 134 loans and SBA 504 carries 25. None of the loans is franchised, the printed share being 0.00%. Volume was fairly flat, between 11 loans in FY2019 and 18 in FY2020, with a peak of 27 loans and $15.6 million in FY2021.

Holder listing

In the 504 program Small Business Growth Corporation holds 14 loans worth $6.5 million. At the head of the 7(a) list stands The Huntington National Bank with 21 loans and $7.7 million, JPMorgan Chase Bank, National Association has 15 loans and $3.2 million, Newtek Bank, National Association 7 and $5.2 million, Village Bank and Trust, National Association 7 and $3.7 million, and Live Oak Banking Company 6 with $9.5 million, the highest average of the five. Each name is whoever SBA lists today, so the table cannot show anyone's willingness to lend.

What the page cannot say about losses

The only loss figure available is a cancellation floor of 14.1% across approvals of FY2017 to FY2024, while Loan Analytics keeps back both the ceiling and any charge-off rate, so Chicago physician offices carry no charge-off evidence, and silence is not zero.

Testing a Chicago-area physician practice

A study of a practice in this region should begin with payer mix and the referral base, because the 0.66x location quotient gives the practice few local peers in this file to compare against. It should model collections per provider, show how the practice would carry debt service if a physician left, and distinguish a purchase of an existing practice from a start-up. The study should price exam rooms and imaging space and anticipate how an appraisal will treat them. Placement of loans in this metro follows July 2023 county definitions.