SBA 7(a) Medical Office Feasibility Study in Colorado

Physician offices that borrow above the national norm

Colorado's physician-office borrowers under SBA 7(a) take somewhat larger loans than their counterparts nationwide. The $300,000 median is 1.19x what physician offices borrow elsewhere, and half of the loans cluster between $100,000 and $808,525. Across FY2017 to FY2026 the program approved 148 loans in this cell for $101.9 million. Colorado ranks 11 among states, and the class holds 11 of 39 positions in the state, so this is a steady middle-weight use of the program rather than a specialty. Franchising is nearly irrelevant at 3.4%, which fits a field of owner-operated practices.

Lenders, counties and recent growth

Four of the five largest current holders in SBA's data are large national or regional banks. Wells Fargo Bank National Association heads the list at 16 loans and $12.0 million; 12 loans each sit with The Huntington National Bank ($9.8 million) and, separately, Newtek Bank, National Association ($7.0 million). Live Oak Banking Company holds 9 loans but $16.7 million, the heaviest average in the group, and JPMorgan Chase Bank, National Association holds 9 worth $2.6 million. These entries describe holders only. Arapahoe County has 28 loans and Denver 24, with Jefferson at 18, Douglas and Larimer at 13 each, Boulder at 12 and El Paso at 11. Approvals reached 24 loans and $16.0 million in FY2025 after 20 in FY2024, well above the 12 loans and $3.1 million of FY2017.

Cancellations and charge-offs

Cancellation is a real feature here: at least 13.1% of approvals through FY2024 never became loans in force, and 15.9% if still-undisbursed loans are treated as lost. Among the 55 loans of the earlier funded cohort, 5.5% have been charged off to date and 3.6% were charged off within five years. A practice that is purchased, expanded or built out can falter on referral flow or payer mix, and the funded loans show some of that. As floors on open loans, these numbers can only rise.

A study for a Colorado medical office loan should begin with the practice, not the building. It needs to identify the specialty, the referral sources, the payer mix and the physicians' production history, then test whether projected visits fit the exam rooms the space provides. If the project is a purchase of an existing practice, the goodwill is a major component and the study must show how patient retention is expected to hold through the transition. Build-out cost per exam room, equipment and the lease should be compared with the income the practice can support, and coverage should be shown with slower patient volume in the first year. Colorado's metro counties dominate the record, so a rural site needs an explicit demand case for its own market. An appraiser will value the property and the practice separately; the study should help each find its footing.