Medical Office Feasibility Study in Tennessee

A physician office market built on 7(a)

Tennessee medical office lending is close to a pure 7(a) market. Of the 65 loans SBA approved for physician offices between FY2017 and FY2026, 64 used SBA 7(a) and a single loan used SBA 504, which tells a lender that owner-occupied building projects are the exception. Gross dollars total $50.1 million and the median is $255,400, or 0.75x the national class median. A location quotient of 0.81x says physician offices make up a thinner portion of Tennessee approvals than of America's overall, while the class holds 10 of 39 in the state's ranking. No distinctive metric clears both Tennessee overall and medical offices nationally.

Who lends and where in Tennessee

The central half of loans runs from $154,800 to $675,000, which reaches from a practice acquisition to a fit-out. Franchising does not apply here, with a share of 0.00%. Republic Bank & Trust Company leads with 8 loans worth $5.1 million, followed by Pinnacle Bank with 7 loans and a large $18.5 million, and Newtek Bank, National Association with 5 worth $917,500. Pinnacle's dollar total next to a modest loan count points to a few big transactions among many small ones. Davidson County has 10 loans, Knox 8 and Shelby 7, then Montgomery and Williamson 6 each. The state ranks 28 of 53 on volume for the class.

Cancellations and the missing charge-off figure

Tennessee physician-office approvals through FY2024 were cancelled at no less than 12.5%, and the ceiling matches at 12.5%. Tennessee's charge-off rate stays unpublished, with under 30 disbursed loans behind it; nothing in this page implies losses are zero. Annual volume has been irregular: 1 loan in FY2018, 11 in FY2022 and $13.9 million in FY2024, then 5 loans and $1.1 million in FY2025 before 12 loans in FY2026.

Questions for a Tennessee practice study

A feasibility study for a physician office should establish who the patients and referrers are: panel size, payer mix, hospital affiliation and the competing practices within reach. A ticket near $255,400 suggests many deals are purchases, partner buy-ins or leasehold improvements, so the study should reconcile projected collections with the historical record and show how the transition of patients is protected. Debt service coverage should be tested against a slower ramp in new providers, since credentialing and scheduling take months. If the practice owns its building, the appraisal splits between the real estate and the business, and each needs its own support.