Medical Office Feasibility Study in Rhode Island

Low tickets, high attrition

Rhode Island medical office lending combines small tickets with a cancellation floor that matters. SBA approved 39 loans for physician offices between FY2017 and FY2026, worth $13.5 million, but the median of $126,000 is just 0.37x the national class median. The location quotient is 1.11x, the class places 7 of 39 across Rhode Island asset classes, and Rhode Island ranks 36 of 53 on volume. Cancellation took at least 20.6% of approvals made from FY2017 to FY2024, rising to 23.5% when undisbursed loans are counted.

A tight band and a Providence centre

The central half of loans runs from $96,500 to $227,500, a narrow band that suggests practice acquisitions and fit-outs of a similar scale. The 7(a) programme made 33 loans and 504 made 6. Franchising does not occur, at 0.00%. TD Bank, National Association has 6 loans worth $2.1 million and Citizens Bank, National Association has 5 worth $660,500, so TD's average ticket is much larger. Providence County has 26 of the 39 loans, Kent 8 and Washington 5, so the loans sit mostly in one county. Volume was 11 loans in FY2018 and none in FY2020.

The unreported loss rate

No charge-off rate is printed: the funded cohort is below the 30-loan line. We show no number and do not suggest that none were charged off. With a cancellation floor this high, the sturdier evidence on this page concerns loans that never closed, not loans that failed.

Questions for a Rhode Island practice study

A physician office study should begin with the panel of patients and the referral relationships at a nearby hospital, the payer contracts the practice holds and the competition from hospital-owned groups, which can absorb patients in a small state. Test the purchase price or fit-out against a median near $126,000, and show how the transition protects collections. Debt service coverage should be run with slower patient growth for newly recruited providers. The high cancellation floor suggests documentation, credentialing or lease problems often arise before funding, so the study should list those conditions and the dates by which each must be met.