SBA 7(a) Urgent Care Feasibility Study

Urgent care's working SBA program

Between FY2017 and FY2026 SBA's 7(a) lenders approved 273 urgent care loans worth $311.4 million, most of the class's SBA lending, and none of the headline figures moves far enough from 7(a) overall and from urgent care in both programs to count as distinct. Beside the 504 urgent care record, though, 7(a) looks steadier. Its cancellation floor for urgent care approvals of FY2017 to FY2024 is 14.0%, with a ceiling of 15.4%, where 504 cancels far more. The median 7(a) urgent care loan is $687,000, below the 504 median, and the central half of these clinic loans spans $200,000 to $1.6 million.

Franchises, lenders and losses

At 17.2%, the franchise share of 7(a) urgent care sits near the top of the 7(a) classes, so brand agreements and franchisor support often sit in the file. Citizens Bank holds 21 urgent care loans worth $30.6 million, Stearns Bank National Association 15 worth $15.4 million and PNC Bank, National Association 13 worth $25.7 million; Customers Bank has 12 and Beacon Bank and Trust 11. Texas leads with 40 loans, then Florida with 32, California with 26 and New Jersey with 24, with Georgia at 15 and North Carolina at 14. Losses are moderate: across 118 clinic loans funded from FY2017 to FY2021 the charge-off floor stands at 2.5%, and 0.85% failed inside five years. Approvals peaked at 34 loans and $57.2 million in FY2021, a year after a low of 12 in FY2020, and FY2026 recorded 20 loans and $19.7 million.

Testing a 7(a) urgent care clinic

A feasibility study for a 7(a) urgent care loan has to settle first what the facility is, because the SBA code it sits in also holds ambulatory surgery and freestanding emergency centers, and the two topics cannot be told apart in these figures. For a walk-in clinic, demand means households within a short drive, the competing clinics, retail health and hospital emergency departments, and visits per day by season. The payer mix and the clinic's contracts with insurers decide revenue per visit, and those contracts may not transfer in an acquisition. Cost covers the fit-out, X-ray and lab equipment, and the staffing model, physician or advanced practice provider, which drives payroll. Coverage should be tested through the visit ramp and at a higher floating rate. Where the 7(a) clinic is leasehold, the appraisal rests on business value and equipment, and the study should show which part of that value would survive a change of provider.