SBA 7(a) Physical Therapy Clinic Feasibility Study in California

California leads the country

Therapy and rehabilitation clinics financed under SBA 7(a) are more numerous in California than in any other state: the rank is 1 by loan count. From FY2017 to FY2026 the program approved 276 loans worth $117.2 million, even though the class sits only 18 of 39 among California asset classes. At 1.07x the nationwide 7(a) median for therapy clinics, the $150,000 median is essentially in line, and half the loans fall between $80,300 and $471,225. Franchise brands account for 3.6% of loans. The weight of this page comes from scale, since the state leads the country by loan count.

Recent acceleration

Volume was 19 loans in FY2017 and stayed between 20 and 25 through FY2023, then rose to 32 in FY2024, 47 in FY2025 and 46 loans worth $14.5 million in FY2026, a complete fiscal year. That is the latest wave in the series, and the newer loans in it have not had time to show outcomes. Among approvals through FY2024 the cancellation floor is 13.1%, or 13.7% counting undisbursed loans. Of 95 loans in the funded cohort, at least 3.2% are charged off to date and 2.1% within five years of approval, floors that open loans may raise.

Who holds the loans

JPMorgan Chase Bank, National Association has 31 loans worth $6.5 million, U.S. Bank, National Association 24 loans worth $21.6 million, Newtek Bank, National Association 22 worth $5.5 million, Wells Fargo Bank National Association 19 worth $7.2 million, with Bank of America, National Association in fifth place at 15 loans and $8.2 million. The ordering by loan count and the ordering by dollars differ, so both are worth reading. The data is SBA's present-holder field only. Los Angeles County has 60 loans, Orange 39, San Diego 30, San Bernardino 21 and Riverside 13.

Testing a California therapy clinic

A study begins with referral flow: which physicians, surgeons and employers direct patients to a clinic, and how many rivals draw on the same sources. Payer mix and reimbursement per visit determine revenue, so the report should model visits per therapist per day, patient attrition, cancellations and no-shows, and the time to credential with insurers. Licensed staff are the capacity limit for a clinic, which makes the staffing plan as important as the lease. At a typical loan of $150,000 the build-out is light, so working capital for the months before payers reimburse is the major question. Debt service coverage should be proven with a slow ramp.