SBA 504 Physical Therapy Clinic Feasibility Study in California

California leads the nation in 504 therapy clinic loans

No state has more SBA 504 loans to rehabilitation and therapy clinics than California, which ranks first by count. The file covers FY2017 to FY2026 with 73 loans and $46.6 million in gross dollars, though the class is only 12 of 39 inside California. California's median loan, $568,000, comes to 1.34x the 504 figure for the class elsewhere, and that ratio is the metric where this cell parts company most with California as a whole and with the class elsewhere. The middle half runs from $363,000 to $824,000. The franchise share is 0.00%. The 504 structure joins a bank loan with a debenture through a development company, which is why borrowers are buying property.

Development companies and counties

The holders SBA lists for 504 include several development companies. Two development companies tie for the lead at 14 loans each, California Statewide Certified Development Corporation alongside The Mortgage Capital Development Corporation, Business Finance Capital holds 8, and Capital Access Group, Inc. and Cen Cal Business Finance Group hold 5 each. Los Angeles County has 14 loans, San Diego 8, Orange 7 and Riverside 6, with Santa Clara, Shasta and Ventura at 4 each. Approvals were 4 in FY2017 and 12 in both FY2021 and FY2024, ending at 8 loans worth $3.8 million in FY2026.

Cancellations and the withheld rate

California 504 clinic loans approved across FY2017 to FY2024 saw cancellation of 10.5% or more, and adding unfunded loans changes nothing. For losses, the page holds back the charge-off rate, as too few loans funded in the seasoned window to give a rate, so we print no number and do not describe the record as free of losses.

What a California 504 clinic study has to test

With property in the plan, the study has to value the building as well as the practice: purchase price against comparable sales, the share of the building the clinic occupies, and the rent from any other tenants. Patient demand should be traced to referrals from physicians, payer contracts and the number of therapists the schedule can employ. A loan near $568,000 in the middle suggests a small suite or condominium and not a free-standing building, and the study should say which. Coverage must be shown on both pieces of financing, with ramp-up months in which visits lag. If the clinic left, could another medical user take the space? Hiring and wage levels in the county complete the picture. Nothing in the coding for this cell is flagged as a limitation.