Medical Office Feasibility Study in New Jersey

Smaller practice loans in a lightly weighted class

New Jersey physicians borrow less from SBA lenders than their peers elsewhere, both in share and in size. The location quotient of 0.66x puts medical offices well under their national weight in the state's lending, and the median loan of $252,000 is 0.74x the national median for the class. Neither gap passes our distinctness screen, which also requires a figure to stand apart from New Jersey's own all-class record, and neither outcome floor does either. On volume, the state's 169 practice approvals in FY2017 to FY2026, worth $79.3 million, rank it 12 of 53, and the class places 11 of 39 among New Jersey's classes.

7(a) lenders and the northern counties

Of these approvals 161 were 7(a) loans and 8 were SBA 504, which points to practice purchases, fit-outs and working capital rather than building purchases. TD Bank, National Association holds 27 loans worth $9.6 million and Newtek Bank, National Association 16, while Wells Fargo Bank National Association's 12 come to $7.8 million; JPMorgan Chase Bank, National Association holds 10 and PNC Bank, National Association 7. New Jersey practice loans sit mostly between $112,000 and $560,500, the middle half, and franchise share is 3.6%. Bergen County leads with 22, then Essex with 21, Union with 19 and Passaic with 18. Annual counts reached 24 in FY2018, FY2024 and FY2026, while FY2021's 19 loans carried the most dollars, $13.8 million.

Floors

Cancellation removed at least 14.8% of New Jersey practice approvals made in FY2017 to FY2024; counting undisbursed loans as cancelled lifts that to 16.4%, close to the class nationally. Charge-offs on the 69 practice loans funded during FY2017 to FY2021 stand at 1.4%, with 0.00% inside five years, a floor under the national figure for physician offices.

Smaller loans put the weight of a New Jersey practice study on revenue rather than collateral. Demand has to be measured as patients by specialty within the practice's draw, set against the hospital systems, group practices and independent physicians already serving them. The payer mix and reimbursement rates the practice can actually collect matter more than gross charges. Cost covers fit-out, equipment and a working-capital cushion for the months before collections stabilise. For an acquisition, the study must estimate what share of the seller's patient base and referral flow will follow a new physician. Debt service coverage should rest on realistic collections per provider. With few building loans in this book, the appraisal will often be of business value, and the study should support it with verifiable income.

These are cohort floors that New Jersey loans still open can raise, and named lenders are the current holders that SBA reports.