SBA 504 Medical Office Feasibility Study in Utah

Utah physician offices borrow at a size that stands out: the median loan is $970,000, which is 1.44x the nationwide 504 physician office median. That ratio, together with a median reaching close to a million dollars, places Utah at the larger end of 504 physician office lending by loan size. The 41 loans total $51.2 million for FY2017 to FY2026, and half lie from $387,000 to $1.4 million. Utah is eighth for the class by loan count, and physician offices are seventh among the state's 39 classes, and franchising plays no part.

Geography without lender names

No lender is named for this cell, so none appears below. Salt Lake County has 18 loans, Utah County 8, Washington 4, Davis 3, Cache and Weber 2, and Box Elder, Sevier, Tooele and Uintah 1 each. Salt Lake alone accounts for a large share, which tells a borrower elsewhere in Utah that comparable projects in their county are few.

Volume by year

Approvals jumped about: 4 in FY2017, 9 in FY2018 with $11.8 million, 2, 3, then 10 in FY2021 at $15.4 million, followed by 2 in FY2022, 4 in FY2023, a single loan in FY2024 with $4.0 million, 4 in FY2025 and 2 in FY2026. The recent run is a fraction of the FY2018 and FY2021 peaks. Cancelled projects were a minimum of 5.7% of approvals made to FY2024; the ceiling agrees.

What cannot be shown

Utah's physician-office loss rate is not published, as too few loans have aged enough to measure. The blank is silence, not a clean record.

What a Utah medical building study has to test

A loan of this size usually finances a building purchased or constructed for a group, so the study should test the physicians' own patient volume, the referral base, payer contracts, and whether space is shared with other practices. It should compare cost per square foot of construction with comparable sales, model tenant-improvement cost, and decide how much of the building the owner occupies and how much is rented to others. Coverage should be run with the leased portion vacant for a period, and the appraisal must show the building's value in a non-medical use.