SBA 7(a) Medical Office Feasibility Study in Kentucky

Physicians' offices: small loans, two urban counties

Medical offices for physicians in Kentucky borrow at the low end under 7(a). Over the ten fiscal years the program recorded 55 approvals worth $18.0 million. The median loan, $150,000, is 0.60x the nationwide level for the class, the smallest ratio on this page, and the central half of loans lies from $100,000 up to $286,000. Franchising is rare at 3.6%. Kentucky sits at 29 among states by count, while physicians' offices rank 10 of 39 inside the state. No basis of distinctness is recorded for this cell, so its lesson is scale: practices here are financed in small pieces, often for equipment, acquisition or working needs, and not for large new facilities.

Holders and counties

The holder list opens with Community Trust Bank, Inc. at 10 loans, $1.7 million. After it come Newtek Bank, National Association (7 loans, $1.5 million), Northeast Bank (6 loans, $629,700) with Republic Bank & Trust Company (5 loans, $1.4 million) after that. SBA's table names the current holder of each loan, which is not always the lender that approved it. Jefferson County leads with 15 loans and Fayette follows with 11, then Laurel and Pike with 3 each. Approvals rose to 9 loans and $4.6 million in FY2025 after $834,700 on 7 loans in FY2024, and 4 loans and $990,000 in FY2026.

Among approvals of FY2017 to FY2024, at least 11.9% were cancelled, and the ceiling is the same. SBA's data leaves the charge-off rate for this cell unprinted because too few early loans had funded. No figure is offered for it, and the gap is not evidence of a flawless record.

Testing a Kentucky practice

A feasibility study for a physician's office should state what the loan buys. A practice acquisition turns on retention of patients and on referrals, so the study should test how revenue depends on the seller and how it will carry over. A new office turns on provider recruitment, payer mix and the space needed for exam rooms and procedure areas. Reimbursement is the largest uncertainty, and the study should test collections under a conservative payer assumption rather than gross charges. Staffing and malpractice cost belong in the expense base. With a median near $150,000, many loans will be equipment or light improvements, but if a practice buys its building, the appraisal will depend on how readily another medical tenant could occupy it. The study should present coverage at partial provider capacity and at full capacity, and show how long the ramp takes.