SBA 7(a) Veterinary Clinic Feasibility Study in Ohio

Fourth nationally, sixteenth at home

Ohio veterinary clinics hold fourth place among states for SBA 7(a) lending to the class, yet they rank only 16 of 39 inside Ohio itself, so the class is a national strength rather than a local one. The program approved 125 loans here during FY2017 to FY2026, worth $69.2 million. What our tests found distinctive is the loan size: $220,000 at the median, a ratio of 0.36x against clinics elsewhere, with the central band of loans from $75,000 to $580,000. Ohio clinics borrow modestly, and none of the loans carries a franchise tie, since the share is 0.00%.

A lender field dominated by one name

SBA's holder listing for this cell is unusually thin at the top: The Huntington National Bank is shown as holder of 56 loans worth $33.4 million, and Live Oak Banking Company of 12 worth $10.0 million. The page offers no more names because the rest of the book is spread thinly. These are holder entries and should not be read as a statement about either institution's credit appetite. Delaware County has 10 loans, Cuyahoga 9, Franklin and Hamilton 6 each, and Butler, Lucas, Montgomery and Stark 5 each. Annual approvals ran at 18 loans and $11.7 million in FY2017 and 17 loans in FY2018, then collapsed to 3 loans and $225,000 in FY2020, and have recovered to a band of 11 to 13 loans a year.

Cancellations and losses so far

Cancellation removed at least 12.7% of approvals made through FY2024, a share that climbs to 14.7% when undisbursed loans are counted. Among 57 funded loans from the earliest cohorts, 3.5% were charged off to date, and the same 3.5% fell within the first five years, so Ohio clinic losses tended to arrive early. Open loans mean these are minimums.

An Ohio clinic study must settle what is being financed: a start-up practice, an acquisition from a retiring veterinarian, or an expansion into surgery, boarding or imaging. For an acquisition, client retention through the handover decides the case, and the study should look at the prior owner's revenue by service line. For a start-up, it must show households per veterinarian in the trade area and the pace at which a new appointment book fills. Doctor recruitment is a real constraint, so coverage should be tested with a vacancy in the associate position. Equipment and build-out costs per exam room should be set against revenue per doctor day. The appraisal will weigh the practice's goodwill separately from any real property, and the study should present them the same way.