SBA 504 Dental Office Feasibility Study in Illinois

Illinois dentists: cancellations are the story

A cancellation floor of 22.6%, with the same ceiling, is what distinguishes Illinois dental offices under SBA 504: more than one approval in five through FY2024 did not proceed. The second sign is size. A median of $346,000 is only 0.58x the nationwide level, although a loan near the middle of the group falls from $301,250 to $790,500. The class holds 36 approvals and $20.2 million. Illinois ranks 9 among states by count, while dental offices stand at 8 of 39 inside Illinois. Franchising is 0.00%.

Development companies and Cook County

Small Business Growth Corporation has 21 loans and $14.7 million, SomerCor 504, Inc. 7 loans and $3.0 million, and Regional Development Company 5 loans and $1.5 million; each is the holder SBA now records. Cook County has 15 loans, ahead of Champaign, Kane, Lake and McLean at 3 each and DuPage at 2. Approvals were 8 loans and $3.5 million in FY2017 and 7 loans and $3.2 million in FY2021, then thinned: none in FY2024, 1 loan of $589,000 in FY2025 and 4 loans and $1.4 million in FY2026.

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Using a high cancellation floor in a dental study

A borrower who knows that a fifth of similar approvals fell away should plan around the usual causes: a purchase contract that did not close, build-out cost that exceeded the plan, or an owner who changed course. A feasibility study for an Illinois office should therefore start by confirming the property or lease and the cost estimate. A dentist financing a building under 504 is often both landlord and tenant, so the study should show what the practice can pay as rent to the building and whether space beyond the practice could be leased. Test chair count against the patient list the practice can reach, hygiene capacity, insurance and fee-for-service mix, and the speed at which a new office fills its schedule. Equipment and imaging are a large share of cost. Coverage should be shown with the practice at partial production, since a new office takes time to mature.

The 22.6% floor should also prompt a plain statement of what happens if the building purchase fails. A study that names the alternative site or lease, with comparable costs, shows a lender that the practice plan survives even when the first property does not.