Medical Office Feasibility Study in Ohio

Ohio physician loans are small and underweight

Ohio's SBA loans to physician practices are small. The Ohio median was $135,000, only 0.39x the class median nationwide; Ohio's middle half covers $70,000 to $401,300, sums that fit equipment, working capital and modest practice purchases rather than new medical buildings. Physician offices are also underweight in Ohio: the location quotient is 0.45x, and the class ranks 11 of 39 among Ohio classes, although Ohio ranks 9 of 53 states with 183 approvals worth $61.1 million from FY2017 to FY2026. Ohio's cell is still not distinct on our screen: neither its median nor its outcome rates pass our margin against Ohio lending in all classes and against doctors' offices nationally at the same time.

One lender defines the Ohio market. The Huntington National Bank holds 65 of these loans, worth $13.0 million, well clear of U.S. Bank, National Association with 9, Fifth Third Bank with 8, KeyBank National Association with 7 and First Commonwealth Bank with 6. SBA 7(a) carried 161 approvals and SBA 504 22; Alloy Development Co., Inc. leads the 504 side with 8 loans worth $6.3 million, ahead of Ohio Statewide Development Corporation with 7 and Community Capital Development Corporation with 5. Franchising is rare at 1.1%. Franklin County leads with 35 approvals, Cuyahoga has 21 and Hamilton 20, then Summit with 12. FY2018 had the most dollars at $11.9 million, and FY2025 the most loans at 25.

Ohio outcomes: cancellations and early losses

At least 11.9% of Ohio's physician approvals for FY2017 to FY2024 ended in cancellation, and 13.9% at the ceiling once undisbursed loans are included. Among the 79 Ohio practices whose loans disbursed in FY2017 to FY2021, the written-off share is 2.5%, and Ohio's five-year rate is also 2.5%, so the Ohio losses on record all came early. Both rates are floors.

What an Ohio medical office study must test

Because Ohio loans are small, a study is often supporting a practice purchase or expansion rather than a building. Demand testing means patients per physician in the service area, payer mix and the pull of the large hospital systems, which differs between Franklin, Cuyahoga and Hamilton counties and suburban counties such as Delaware or Warren. For an acquisition, the study must verify the seller's collections and whether referrals stay. Cost testing covers equipment, technology and leasehold work. Ohio coverage of debt service has to hold in the first years, since Ohio's losses came early, with visits and reimbursement at realistic levels. With little real estate in most deals, the lender's collateral is the practice itself, so the study's value conclusion has to rest on cash flow.