Medical Office Feasibility Study in Illinois

Illinois physicians borrow below their weight

Medical offices are a modest part of Illinois SBA lending. The state approved 164 loans to physician practices worth $85.1 million over FY2017 to FY2026, which places Illinois 13 of 53 among states, with the class also 13 of 39 among Illinois classes, and the location quotient of 0.59x shows physicians taking a much smaller slice of Illinois SBA activity than of the national book. The median loan is $276,950, 0.81x the national class median, and our screen does not flag the cell.

Cook County and the development companies

Cook County alone accounts for 96 approvals, with DuPage at 20, Lake at 15, Will at 7 and McHenry at 5. The middle half of Illinois medical office loans runs from $143,750 to $595,400, and SBA 7(a) carries 140 approvals against 24 under SBA 504; franchising is absent at 0.00%. Small Business Growth Corporation holds 16 of the 504 loans for $8.1 million and SomerCor 504, Inc. 7 for $5.2 million. The Huntington National Bank holds 20 of the 7(a) loans for $7.4 million, JPMorgan Chase Bank, National Association 15 for $3.2 million, Village Bank and Trust, National Association and U.S. Bank, National Association 7 each, and Live Oak Banking Company 6 worth $9.5 million, the largest tickets among them.

Outcomes for Illinois practices

At least 13.6% of Illinois medical office approvals from FY2017 to FY2024 were cancelled, 14.4% at the ceiling. Among 74 Illinois practices funded across FY2017 to FY2021, 2.7% or more are charged off and 1.4% within five years. FY2021 stood out with 28 approvals worth $17.7 million; FY2025 had 16 worth $14.9 million.

A study for an Illinois physician practice has to test the practice and, where 504 is used, the building. Demand comes from the patient panel, referral sources and payer contracts, set against hospital-owned and independent practices nearby. Cost includes build-out to clinical standards and equipment, priced from bids. Coverage should be calculated from net collections after payer adjustments, with a ramp for a new location or a transition period for an acquisition. The appraisal of a medical office building depends on its appeal to other healthcare tenants, and the study should show comparable rents.

The figures cover only SBA-guaranteed loans to physician offices, classed by the borrower's own industry code; dental, therapy and other clinics coded elsewhere are not included, and every Illinois rate is a floor.