Medical Office Feasibility Study in Texas

Texas physicians borrow heavily through SBA

Physician practices take a markedly larger share of SBA lending in Texas than in the country as a whole: the location quotient for medical offices is 1.44x. Texas ranks 3 of 53 among states for physician office loans, with 819 approvals and $616.4 million over FY2017 to FY2026, and the class sits 9 of 39 inside the state. The median Texas practice loan is $391,000, 1.14x the class median nationally, and half of all approvals fall in a central band from $150,000 to $950,000. The value of the cell is in how the market is built.

Big banks, Texas CDCs and the metro counties

Large national banks lead. PNC Bank, National Association holds 66 loans worth $56.0 million, Wells Fargo Bank National Association 63 worth $56.1 million, and JPMorgan Chase Bank, National Association 63 smaller loans worth $30.1 million, with The Huntington National Bank at 59. SBA 504 carried 99 loans against 720 under SBA 7(a), spread among Texas development companies: Capital Certified Development Corporation with 23 and LiftFund, Inc. with 21, while Greater East Texas Certified Development Company holds 20. Franchise codes appear on only 2.1% of loans. Harris County leads with 150 loans, then Collin with 91, Tarrant with 88, Dallas with 73 and Bexar with 63, while El Paso's 35 show the class reaching beyond the big metros. FY2025 brought 113 loans and $84.1 million, near the top of the series.

Outcome floors and the feasibility questions

Physician deals cancel more than their loss record would suggest. No fewer than 13.2% of Texas practice approvals from FY2017 to FY2024 fell through after approval, and with undrawn loans counted the ceiling is 14.6%. Charge-offs stand at 4.6% of the 348 practice loans funded in FY2017 to FY2021, 3.2% within five years, and both will rise if open loans fail. For a lender, the practice's revenue cycle and payer mix matter more than the building. A feasibility study for a medical office in Texas has to measure patient demand for the specialty in the trade area, the physicians and urgent care or hospital clinics already serving it, and the referral sources the practice depends on. It must price the build-out and equipment, test reimbursement against the expected payer mix, and show debt service coverage through the months before collections catch up with visits. Where the practice buys its building, the appraisal will draw on medical office rents and comparables, and the study should give the appraiser that support.

The class carries no special limitation. It covers physician offices as coded in SBA's loan files, and the outcome rates are floors.