SBA 7(a) Dental Office Feasibility Study in Wisconsin

Wisconsin dentistry: sizable loans and an unbroken clean record

In the Wisconsin class ranking dental offices come 11 of 39, and Wisconsin stands 24 among states for 7(a) dental volume. SBA approved 90 loans from FY2017 to FY2026 for a combined $88.0 million. The median of $560,650 is 1.13x of the 7(a) figure recorded nationally for dental offices, and the central half is broad, from $101,250 to $1.5 million, which shows how differently a small equipment loan and a practice purchase with real estate are sized. No loan is franchised, at 0.00%. The funded cohort of 53 loans has recorded no losses: the charge-off rate is 0.00% now and 0.00% at year five.

Holders: a regional bank and national players

Most numerous by count is The Bank of Kaukauna, whose 11 notes total $4.0 million. Live Oak Banking Company and Wells Fargo Bank National Association each hold 10, worth $17.8 million and $6.1 million, so Live Oak's notes are far larger. Huntington's 8 notes total $12.5 million, whereas U.S. Bank, National Association carries 7 for only $1.1 million. SBA lists current holders, not originators, and the rows give no view of any bank's appetite. Milwaukee County has 14 loans and Outagamie 13, followed by La Crosse and Waukesha with 7 each and Racine with 6.

Cancellations and annual dollars

Cancellation sits at 13.8% on both the floor and ceiling measures. A zero charge-off rate is not a guarantee, since open loans are still exposed. Annual dollars range from $14.1 million in FY2017 and $15.1 million in FY2024 down to $1.9 million in FY2019, a spread that reflects a few large deals more than any trend.

Wisconsin dental study: the questions that matter

Start by naming the transaction. A practice acquisition turns on the retention of the existing patient base after the seller leaves, the age and condition of operatories and imaging equipment, and the production per hygiene hour. A start-up depends instead on local dentist-to-resident ratios, insurance panels accepted and the speed with which new patients fill the schedule. The wide Wisconsin range means a request near $1.5 million should show a real estate component and justify it with a lease comparison. Cost lines must separate build-out, equipment and goodwill, since the appraisal values them differently. Cash flow should be tested through a transition year in which collections dip, and the study should name the dentist's licensure, years in practice and any associate arrangements. The trade-area definition should be specific to the site and not a regional average.