Physical Therapy Clinic Feasibility Study in Illinois

Illinois therapy clinics: smaller share, larger tickets

Rehabilitation and therapy clinics in Illinois take larger loans than therapy clinics elsewhere, with a median of $180,000 that is 1.20x the national midpoint, but they weigh less in Illinois lending (location quotient 0.77x) and rank 16 of 39 among the state's classes. Illinois ranks 11 of 54 among states on 97 loans and $36.0 million over FY2017 to FY2026. Both the median and the outcome rates are read here as plain figures.

Leased clinics and the Chicago area

The middle half of Illinois approvals runs from $98,000 to $375,000. Of the 97 loans, 78 used 7(a) and 19 used 504; SomerCor 504, Inc. holds 9 and Small Business Growth Corporation 8 of the 504 loans. JPMorgan Chase Bank, National Association holds 11 Illinois therapy loans for $1.7 million, The Huntington National Bank 9 for $2.9 million and Byline Bank 7 for $3.8 million. Franchised clinics take 3.1%. Cook County has 51 loans, DuPage 15, Will 10 and Lake 7. FY2021 was the strongest year by dollars, at 12 loans and $9.1 million.

Small cohort, clean early record

The Illinois loss cohort is 34 loans disbursed over FY2017 to FY2021, close to our 30-loan minimum, and 2.9% of it is charged off to date while 0.00% failed within five years, so the losses that exist came late. Both are floors. Cancellations are higher, a floor of 12.8% on FY2017 to FY2024 approvals and 14.1% at the ceiling. For a lender, therapy clinics have repaid in their early years; for an Illinois borrower, cancellations are the main warning.

An Illinois therapy clinic study has to show where patients will come from: physician and hospital referral sources, the competing outpatient clinics in the county, and the payer mix, Medicare and the major insurers included, that sets revenue per visit. Cost covers the fit-out, treatment equipment and working capital while visits build. Coverage of the debt should be shown at realistic therapist productivity and a conservative visit ramp. Where a 504 loan buys space, the appraisal will treat it as medical or flex office space, and the study's value should agree. No coding caveat applies to this class.