SBA 504 Veterinary Clinic Feasibility Study

Veterinary 504: the cancellation floor stands out

Veterinarians took 496 SBA 504 loans worth $438.5 million between FY2017 and FY2026. The measure that marks this cell is cancellation: at least 18.0% of the clinics approved in FY2017 to FY2024 saw their loans cancelled, and up to 22.8% with undisbursed loans counted. That floor is higher than veterinary lending across both programs and higher than the 504 program across its asset classes, by more than our margin. For a practice owner, the approval letter is not the finish line.

The loss record, by contrast, is clean. Not one of the 228 clinic loans funded during FY2017 to FY2021 has ended in charge-off; the floor reads 0.00%, and the five-year rate 0.00%. A clinic that gets its 504 loan funded has, on this record, avoided charge-off; the hazard is the stretch before funding. Clinic construction carries specialized costs, from kennels and surgical suites to isolation wards and drainage, and a bid that rises after approval or an appraisal that lags cost can stop the deal.

Sizes, lenders and states

The median loan is $626,500, with the middle half from $328,500 to $1.1 million, and franchise share is 0.00%. WBD, Inc. leads the CDCs with 27 loans and $29.5 million, ahead of Florida Business Development Corporation with 26 and $19.8 million; Florida First Capital Finance Corporation, Inc. follows with 24 loans and $21.2 million, then Mountain West Small Business Finance (19 loans, $21.0 million) and Empire State Certified Development Corporation (18 loans, $14.6 million). California leads with 56 loans, Florida has 47 and Texas 34, with Wisconsin at 25 and Ohio at 22. Volume peaked at 92 loans and $85.9 million in FY2021 and has fallen to 30 in FY2025 and 27 in FY2026.

What a clinic study has to test

This class has no limitation line. For a 504 veterinary clinic, a feasibility study has to test demand from pet-owning households in the drive-time area and the clinics already serving them; cost for the specialized build-out, with contingency sized to the bid risk the cancellation floor implies; debt service coverage from practice revenue after veterinarian pay; and the appraisal, which should show what the building is worth to another medical or service user, because a clinic built around one practice's layout can appraise below cost.