SBA 7(a) Physical Therapy Clinic Feasibility Study in New Jersey

Tiny tickets, a high state rank

In SBA 7(a) lending to rehabilitation and therapy clinics, New Jersey stands 5th nationally, with 126 loans and $30.0 million in gross dollars approved. Within New Jersey's own list of asset classes, though, therapy clinics are only 13 of 39, so the state's rank rests on the number of loans rather than on the place of the class within the state. The loans are small. A median of $100,000 is 0.71x what such clinics borrow nationally, and the middle of the New Jersey book spans $26,250 to $249,700. A franchise sits behind 7.9% of loans.

TD Bank, National Association holds 40 of the loans, a share that dwarfs everyone else: Newtek Bank, National Association has 9, Manufacturers and Traders Trust Company 7. PNC Bank, National Association has 6, and so does Northeast Bank. The page prints the holder as SBA reports it, which is a fact about who has the paper and says nothing about a bank's standards. Bergen and Ocean counties lead with 16 loans each, Middlesex has 13 and Monmouth 11, followed by Essex, Hudson and Union with 8 each.

Losses and cancellations

Cancellations stand at 11.0% on the floor, and the ceiling repeats 11.0%. A modest funded cohort of 47 loans carries the loss record: charge-offs of at least 6.4% to date, with 2.1% inside the first five years. Anything unresolved can still deteriorate, which makes both numbers minimums. Each is a floor, and in a cohort this size a few further charge-offs would shift both. Annual volume sat at 9 loans and $579,000 in FY2017 and rose to 22 loans and $5.3 million in FY2025, with a $7.1 million peak in FY2023.

What a New Jersey clinic study must prove

A feasibility study for a therapy clinic has to begin with referrals: which physicians and hospital systems will send patients, how many visits a typical case needs, and what the payers reimburse per visit. It should show clinician capacity, because revenue depends on treatment hours, and how long a new therapist takes to carry a full schedule. Lease and build-out costs belong against a modest ticket, while the ramp to break-even decides debt service coverage. Buying an existing practice calls for a transition case in which some patients follow the seller out the door. The appraiser will look at documented collections.