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

Small clinics, one dominant holder

Michigan's rehabilitation and therapy clinics borrow modestly. Their median 7(a) loan is $101,850, a mere 0.73x of the nationwide 7(a) typical for therapy clinics, and most loans sit between $50,000 and $218,750. SBA recorded 106 approvals worth $25.1 million. Michigan ranks 8 among states for the program's clinics by count, even though the class is only 16 of 39 in Michigan itself. Franchise ties are rare at 2.8%, which fits a field of independent practices.

The Huntington National Bank holds 49 of the loans in SBA's files, worth $5.9 million, so nearly half the book sits with one holder and its average loan is small. ChoiceOne Bank holds 12 worth $7.6 million, a much heavier average, and Fifth Third Bank holds 9 worth $2.1 million. This is a list of holders, not a description of anyone's standards. Oakland County has 32 loans, Wayne 18, Macomb 12, Genesee and Kent 9 each, and Jackson and Saginaw 4 each.

Timing

Approvals fell from 14 in FY2017 to 5 in FY2020, then climbed to 19 in FY2024 with $6.3 million, before dropping to only 3 in FY2026, worth $556,100. The latest year is incomplete as a guide, and the loans from the recent peak have had little time in which to default.

Cancellation after approval was at least 12.1% for loans approved through FY2024, climbing to 15.4% if loans still undisbursed count as cancelled. The funded cohort is just 40 loans; within it, charge-offs of 2.5% or more have been recorded, with the same 2.5% inside five years. With so few loans, one default moves the figure by a visible amount, and later failures can raise it.

Tests for a Michigan therapy clinic

Referrals are the revenue engine of a therapy practice, so a study should trace which doctors and employers refer patients, and show how many visits per week the clinic needs at the reimbursement rates it can actually collect. Payer mix matters: commercial insurance, auto and workers' compensation pay differently and on different schedules, and the cash gap between treating and being paid has to be funded. Because typical loans are small, the budget is mostly leasehold improvements, treatment tables and working capital, and the plan should show how many therapists must be on the floor before the payment is covered. If one therapist is the draw, say what happens when that person leaves.