Medical Office Feasibility Study in Louisiana

Steady lending with almost no cancellations

Louisiana medical office lending is distinctive for how rarely approvals fail. The cell holds 49 SBA loans for physicians' offices from FY2017 to FY2026, worth $20.6 million, and the cancellation floor for approvals through FY2024 reads 0.00% with a ceiling of 2.9%. Cancellation is where this cell parts company with Louisiana lending in general and with physician office lending nationally. For a lender it says that approved physician practices usually close; for a borrower it says that a well prepared file seldom stalls. Loss history is not shown, as the funded cohort is too small to measure.

Size and weight

A median of $286,000 sits at 0.84x of the national class median; half of the loans fall between $167,000 and $400,000, a narrow band that fits practice purchases and build outs rather than large buildings. The state ranks 32 of 53 for the class, physician offices are 9 of 39 among Louisiana asset classes, and a location quotient of 0.90x puts them slightly below their national weight. The 7(a) program carried 45 loans and 504 carried 4. No loan is a franchise.

Who lends, and where

Hancock Whitney Bank stands alone among lenders named here, at 7 loans and $5.5 million. East Baton Rouge and Saint Tammany parishes have 7 loans each, Lafayette has 6, and Orleans has 4. The calendar is lumpy: FY2022 produced a single loan of $250,000, while FY2024 produced 10 loans and $3.3 million and FY2025 produced 11 loans and $4.6 million.

What a physician office study should test

A Louisiana study should say what kind of practice is being financed and who will refer patients to it. Test the payer mix, the share of patients covered by commercial insurance, Medicare and Medicaid, and the time it takes a new physician to build a panel. Hospital affiliation, privileges and competing groups in the catchment matter more than foot traffic. Build out for exam rooms, records and compliance can exceed the loan if the space is raw, so a cost estimate from a contractor is useful. Coverage must account for slow reimbursement in the first months and for the departure of a partner. The appraiser will separate goodwill from the real estate, and the lender should see that cash flow carries the loan on its own.