Medical Office Feasibility Study in the Philadelphia-Camden-Wilmington, PA-NJ-DE-MD Metro Area

Physicians' offices in a four-state metro area

Delaware, Maryland, New Jersey and Pennsylvania all fall inside this metro area. SBA's files record 79 medical office (physicians) loans here for FY2017 to FY2026, adding up to $46.3 million of gross dollars approved. Among the 39 classes recorded for the area, this class is ranked 14 of 39, while the area sits 20 of 488 among metro and micro areas ranked for these loans. At 0.53x, the location quotient has the class holding a thinner portion of area lending than nationwide practice would suggest. County counts follow: Montgomery County, PA 20, Philadelphia County, PA 16, Bucks County, PA 12, New Castle County, DE 9, Burlington County, NJ 8 and Chester County, PA 5.

Loan sizes and programs

Typical loans are small: the median is $275,000, or 0.80x what the class median is nationwide. Loans in the middle band stretch from $100,000 to $627,150. The tally reads 72 under the 7(a) program, beside 7 in the 504 program. A physician buying equipment and fitting out leased space is therefore the usual picture, and the larger real estate purchase that a 504 structure supports is the exception. The franchise share is withheld, so nothing should be assumed about it.

Who holds the 7(a) loans today

The names below are holders in SBA's records. They are not makers of the loans, and the list says nothing about any holder's credit decisions. Quaint Oak Bank holds 6 loans at $3.5 million. United Community Bank (SC) holds 6 at $3.1 million. Wilmington Savings Fund Society FSB holds 6 at $1.3 million. Newtek Bank, National Association holds 5 at $5.8 million, and Newtek Small Business Finance, LLC holds 5 at $4.7 million. With five names bunched this closely, no single holder commands the record.

The years on file and the cancellation floor

Approvals ran 11 loans and $6.1 million in FY2017, 7 and $3.2 million in FY2018, 6 and $3.4 million in FY2019, 10 and $5.3 million in FY2020, 14 and $12.8 million in FY2021, and 12 and $5.6 million in FY2022. FY2021 leads on both loans and dollars among the years shown. FY2023 to FY2026 are withheld, which is different from zero. Later cancellation touched at least 13.2% of the approvals from FY2017 through FY2024, and the upper bound, which adds loans never disbursed, reads 13.2% too. No charge-off rate appears: Loan Analytics' own rule hides it, because the loans disbursed in FY2017 to FY2021 number fewer than 30.

What a project here must prove

Each loan is placed by project county against the July 2023 metro boundaries and matched by county name, so loans from counties that cannot be placed are absent and the totals above understate the activity. A study for a physicians' practice in this region should prove the referral and insurer base around the specific site, decide between leasing and owning the suite, and cost the clinical fit-out. Coverage of debt service needs a slower build in patient visits than the practice would like. Since four states meet in this area, licensing and market conditions belong to the county where the office will stand, and the appraisal should be ordered for that address.