Medical Office Feasibility Study in Kentucky

Kentucky physician offices: the smallest tickets among the cells

Physician offices in Kentucky took 57 loans across FY2017 to FY2026, with $18.7 million approved. The median loan is just $150,000, only 0.44x the class median nationally; the central half spans $100,000 to $300,000. Kentucky's physician practices are being financed in small pieces, which fits practice purchases, equipment and working capital more than buildings. On rank, Kentucky is 29 of 53 states, medical office is 9 of 39 among classes financed in Kentucky, and the quotient of 0.95x sits near the national share.

Almost entirely 7(a)

Of the 57 loans, 55 are SBA 7(a) and 2 are SBA 504, and the franchise share is 3.5%. Community Trust Bank, Inc. leads with 10 loans and $1.7 million, Newtek Bank, National Association has 7 loans and $1.5 million, Northeast Bank 6 loans and $629,700, and Republic Bank & Trust Company 5 loans and $1.4 million. These lenders each hold files with a modest dollar value per loan, and the lender list carries no specialist with a few huge deals. For a physician seeking to buy a building, the 504 route is barely used here, so a borrower should expect to ask lenders about it rather than wait for an offer.

On Kentucky physician-office approvals the cancellation floor reads 11.9% for FY2017 to FY2024, with an equal ceiling. Kentucky's charge-off rate stays unpublished, as the seasoned cohort falls short of 30 loans; the gap is not a statement of zero. A lender should read a Kentucky physician-office portfolio as thin evidence on losses and lean on the borrower's own financials.

What a Kentucky study should test

Jefferson County has 15 loans and Fayette 12, which makes Louisville and Lexington the only deep markets, while Kenton, Laurel and Pike have 3 each. Outside those two metros, a study will find almost no local lending history, so it must lean on payer mix, referral sources and hospital affiliation instead. Cost should include a medical build-out, which usually runs well above ordinary office finish, and the technology a practice needs. Coverage of debt service must be tested against a ramp for new patients and against the loss of a partner. Valuation work must separate the building from the practice. Yearly volume reached 9 loans and $4.6 million in FY2025, up from 3 loans in FY2019 and FY2020, so the market is growing from a low base.