Physical Therapy Clinic Feasibility Study in Washington

Washington therapy clinics: a leading state with bigger loans

Washington is a leading SBA market for rehabilitation and therapy clinics. It ranks 5 of 54 among states, with 132 approvals worth $58.1 million from FY2017 to FY2026, and at a 1.38x location quotient, therapy clinics weigh more in Washington's SBA lending than in the national mix. The Washington median of $250,000 is 1.67x the national clinic median, and the quartiles bracket Washington clinic loans at $75,000 and $528,750. Within the state, therapy clinics place 15 of 39 classes. Our screen does not mark the median or either outcome rate as distinct from both Washington lending in general and therapy clinics nationally once sampling noise is allowed, but the size of the ticket is the first thing a lender will see.

Development companies, banks and King County

SBA 504 carries 23 loans, spread across Evergreen Business Capital with 10 for $5.3 million and Northwest Business Development Association and Ameritrust CDC with 6 each. Of the 109 7(a) loans, Banner Bank holds 14 for $2.4 million, Heritage Bank 11 for $5.5 million, Columbia Bank 10 for $1.1 million, and Washington Trust Bank and KeyBank National Association 8 each. No franchise appears, at 0.00%. King County dominates with 47 loans, followed by Pierce with 16, Skagit and Thurston with 8 each and Clark with 7.

Therapy loans in Washington have mostly repaid. Of the 66 that funded in FY2017 to FY2021, 3.0% are charged off, and all of that 3.0% failed within five years, so the risk sits in the early years. Cancellation after approval is at least 11.0% for FY2017 to FY2024 approvals and 12.0% at the ceiling. These are floors. Volume moves in steps: 19 loans in FY2019, 6 for $1.5 million in FY2023, and 17 for $5.4 million in FY2026.

What a Washington clinic study must test

A Washington therapy clinic study has to prove referral volume first: the physicians, surgeons and health systems that send patients, and the rival Washington clinics treating them now in King, Pierce or the smaller counties. It should test visits per therapist, payer mix and reimbursement rates, since collections, not visits, pay the loan. Cost covers the build-out, treatment tables and gym equipment, plus enough cash to bridge credentialing and the reimbursement lag. The coverage test needs a realistic ramp in visits, because the losses recorded in this cell all came in the first five years. Where a 504 loan buys a building, the appraisal should rest on comparable medical and flex office sales, apart from the clinic's goodwill.