SBA 7(a) Dental Office Feasibility Study in Tennessee

Tennessee dentists: large loans, and the highest loss floor in the set

In Tennessee, SBA approved 100 dental office loans in the FY2017 to FY2026 window under 7(a), totalling $135.8 million. Size sets this cell apart: the median loan of $821,750 is 1.66x the nationwide ratio, a ratio that differs from both Tennessee's all-program dental record and the national 7(a) dental record, and the interquartile span runs from $347,500 to $2.0 million. The state is 21 by loan count for the pairing and dental offices stand 7 of 39 at home. Franchising is absent at 0.00%.

A national lender in a regional market

Live Oak Banking Company holds 34 of these loans, with $78.4 million of the dollars, an enormous share of the cell. The Huntington National Bank sits at 8 loans and $9.0 million, and Fifth Third Bank 6 loans and $9.2 million. Shelby County has 21 loans, Davidson 19, Hamilton and Williamson 11 each, and Rutherford 9. Volume has been uneven, with 3 loans in FY2020 and 13 in FY2021, and FY2026 closed with 12 loans and $24.1 million. Since one lender holds so much of the record, a borrower should read the average ticket as partly a reflection of its book.

Cancellation took at least 12.7% of the dental approvals Tennessee received from FY2017 through FY2024; the ceiling is identical. The loss figure is more striking: across 46 funded loans out of FY2017 to FY2021 approvals, the running write-off floor is 8.7%, and 4.3% went bad inside five years. As floors, they may still rise.

Testing a Tennessee dental request

A study for a Tennessee practice at this scale has to test whether the project is larger than a single-chair opening: multiple operatories, a new building, or an acquisition of an established practice. It should confirm that the surrounding population can fill the schedule, that payer contracts and associate dentists are in place, and that the borrower's cost per operatory matches the market. Debt service coverage should be shown with revenue ramping, a case with the lead dentist absent for a period, and higher equipment replacement cost. The appraisal needs to establish what the real estate would sell for to another user, and the lender should ask how much of the loan is goodwill.