SBA 7(a) Dental Office Feasibility Study in Michigan

A dental cell with no franchising and no charge-offs yet

Dental offices that borrow under SBA 7(a) in Michigan are independent practices, with a franchise share printed at 0.00%. SBA approved 216 of these loans across FY2017 to FY2026, worth $195.0 million in gross dollars. A $416,500 median sits at 0.84x the nationwide dental median, and loans between $140,700 and $1.2 million cover the central half. Michigan ranks eighth among states by count, and dental offices stand ninth of 39 in its own list of classes.

The outcome record

Of 107 funded loans in the cohort, none shows a charge-off in either floor measure: both the to-date figure and the first-five-years figure print as 0.00%. A zero floor means only that nothing had been charged off when SBA's data were taken; loans still open can fail. The larger worry is cancellation, at 13.3% or more of Michigan approvals through FY2024 and 14.5% if loans never disbursed are counted, which suggests some practice purchases and build-outs never reach closing.

The banks in the table

With 54 loans worth $24.4 million, The Huntington National Bank has the most, but Live Oak Banking Company, at 40 loans, holds $78.0 million, a far greater sum per loan. Lower down, PNC Bank, National Association has 10 worth $4.0 million and Fifth Third Bank 14 worth $13.0 million, while United Midwest Savings Bank National Association has 19 worth $22.6 million. SBA lists the present holder, which says nothing of anyone's practices. Oakland County leads with 49 loans, then Wayne with 25, Macomb with 21 and Kent with 19. Approvals fell from 36 in FY2017 to 12 in FY2023 and were 19 in FY2026.

Testing a Michigan dental practice

The first line of any study is the use of funds: a practice purchase, a new suite or equipment. A purchase turns on how many patients stay once the seller leaves, how much each chair produces and what multiple of collections is being paid. A start-up turns on households in the trade area, dentists already serving them, and the split between insurance networks and fee-for-service patients. Oakland and Wayne counties differ in income and competition, so the study must say which market it is. Payment coverage should be shown through a slow first year. Because valuation rests on adjusted earnings, the adjustments themselves need explaining.