Medical Office Feasibility Study in the San Juan-Bayamón-Caguas, PR Metro Area

A concentration far beyond the national pattern

Medical offices dominate SBA lending around San Juan, Bayamón and Caguas. The location quotient prints as 6.60x, meaning the class takes a share of local loans several times what it takes of the national book, and inside the area medical offices rank 1 of 39 classes. Nationally the area stands 5 of 488 for the class, on 274 loans approved across FY2017 to FY2026 with $57.6 million gross. Few cells show a quotient of that size, so the cell deserves to be read on its own terms.

Tickets run small: $150,000 is the median, and its ratio to the national median is only 0.44x. Lower quartile $50,000, upper quartile $268,875. A feasibility study here is sizing a physician suite, a clinic fit-out or equipment at that scale, and it must show why a sum at that level covers the project. San Juan Municipio holds 124 loans, Bayamón 34, Guaynabo 17, Caguas 16, Manatí 15, Carolina 12, Humacao 6, Las Piedras 6, Fajardo 5 and Gurabo 5.

Programs, franchises and who holds the loans

Program mix: 246 loans carry the 7(a) label and 28 carry 504. No franchise flag appears, since the share is 0.00% and physician practices rarely franchise. Two commercial banks dominate: Banco Popular de Puerto Rico (113 loans, $18.7 million) and Oriental Bank (109 loans, $20.6 million). The 504 side shows PYMES Financial Partners, Inc. (12 loans, $5.5 million), plus a community financing corporation that SBA lists with 9 loans and $2.7 million; Marketing Small Business Finance Corporation (7 loans, $4.3 million).

Those holder rows are SBA entries for loans that an institution holds or held on the island. They describe books of business. A borrower in Puerto Rico should not read a name on the list as an indication of what that institution will fund, and nothing here tells a lender what to require.

Outcomes, with a caution

Cancellation after approval has a floor of 22.9% for approvals through FY2024, climbing to 25.2% when undisbursed loans are counted as cancelled. Given such a floor, a lender will want permits, licensure and the lease settled early. By contrast the charge-off floor prints as 0.00% among 88 loans disbursed in the earlier FY2017 to FY2021 window, and the five-year figure is also 0.00%. These are floors on a cohort of modest size; a zero floor shows no charge-offs recorded in SBA files, which is not a promise about future loans.

A study should test patient demand per physician in the specific municipio, payer mix, referral relationships, the cost of build-out and equipment, and coverage at a loan near $150,000. It should also say plainly how a practice in Manatí or Fajardo differs from one in San Juan Municipio, where 124 of the loans sit. The unit in Puerto Rico is the municipio: San Juan, Bayamón, Guaynabo and Caguas supply loans to the 274 after a lookup in the July 2023 delineation, and a municipio that fails the lookup is excluded, so 274 is a minimum.