SBA 7(a) Dental Office Feasibility Study in Illinois

No charge-offs, no franchises

Illinois dental offices have funded without a single charge-off in the SBA 7(a) file: not one of the 94 loans funded between FY2017 and FY2021 ended in a charge-off, so the rate is 0.00% so far and 0.00% by year five. Cancellation is 9.8% across approvals dated FY2017 to FY2024, unchanged when undisbursed loans are added. These are floors, since open loans may yet fail, but a clean record at this size is a finding. No dental loan here was franchised, at 0.00%.

The place of dentistry in Illinois

SBA has approved 198 such loans since FY2017, worth $110.0 million. Illinois ranks 9th by loan count, and dental places 11th among its 39 classes. The median of $300,000 is 0.61x the nationwide 7(a) median for dental offices, and loans in the middle range from $116,375 to $698,500. That reads as practice purchases and suite build-outs more than ground-up buildings, in line with what a 7(a) loan supports.

Where and who

Cook County has 97 loans and DuPage 37, which together hold most of the file, then Lake with 12, Kane with 10 and Winnebago with 8. The Huntington National Bank is the leading name at 40 loans, ahead of Live Oak Banking Company with 13, and three lenders tie at 7: Village Bank and Trust, National Association, Wells Fargo Bank National Association and Newtek Bank, National Association. SBA lists present holders, so the tallies describe holdings and carry no view of anyone's underwriting.

Timing

Approvals peaked at 29 loans in FY2021 and fell to 11 in FY2023, then recovered to 27 in FY2024. FY2026 shows 14 loans and $5.8 million, so the year is partial in dollar terms.

What an Illinois dental study has to test

For a purchase, the study must examine the seller's production and collections, the share of patients who stay after the sale, and the payer contracts that transfer. For a start-up, it must show the time to reach a full schedule and the marketing that will fill it. Chair count, equipment, imaging and the lease should be compared with a loan near $300,000. Illinois borrowers compete with group practices and dental service organisations, and the study should say how a solo practice will hold its patients. Stress the model with a slow ramp and a quarter of weak production, and the appraisal will use adjusted earnings.