SBA 7(a) Medical Office Feasibility Study in Texas

Texas physicians' offices: the heavy end of 7(a)

Texas places 2 among states for 7(a) loans to physicians' offices, with 720 approvals in FY2017 to FY2026 and $518.3 million in gross dollars. Inside Texas the class sits 10 of 39. The program-specific figure that matters is the ticket: a median of $350,000 is 1.39x the nationwide 7(a) benchmark for physicians offices, so Texas practices borrow noticeably more per loan than their peers, and the central half stretches from $150,000 to $887,000. Franchising barely registers at 2.4% of loans, as one expects when physicians open independent practices.

Four banks, nearly level

Holdings are spread evenly. Wells Fargo Bank National Association has 63 loans and $56.1 million, level with PNC Bank, National Association at 66 and $56.0 million; next come JPMorgan Chase Bank, National Association (63, $30.1 million); The Huntington National Bank (59, $32.7 million); Newtek Bank, National Association (40, $17.5 million). SBA names each as the holder or former holder of the loans; the table is silent on lending policy. Harris County has 140 loans, Collin 82, Tarrant 79, Dallas 68, Bexar 48, Fort Bend 42, Denton 37, El Paso 30, Travis 26 and Montgomery 25.

Where outcomes stand

Cancellation took at least 13.6% of Texas approvals made from FY2017 through FY2024, rising to 15.1% when undisbursed loans are included. Of 302 loans funded across FY2017 to FY2021, the share charged off to date is at least 5.3%, and the share lost inside five years is 3.6%. Because open loans remain exposed, lenders should handle each as a lower bound.

What a study for a Texas practice has to test

Patient volume leads the list: the population and referral network around the site, the physicians and clinics already competing, and the payer mix that determines revenue per visit. Buildout cost for exam rooms, imaging and records systems should be set against a ticket near $350,000, with any larger plan explained. A schedule that fills slowly after opening must still cover debt service, so the analysis needs a ramp case. The 7(a) program guarantees a portion of a private lender's loan for purposes such as equipment, working capital and purchase, and an appraisal of an owned suite will rest on rent a successor physician would pay.