Veterinary Clinic Feasibility Study

A longer record, larger loans

Since FY1991 SBA has approved 12,777 7(a) loans to veterinary practices for $8.13 billion and 2,332 504 loans for $1.27 billion. The FY2017 to FY2026 decade holds only 2,941 of those 7(a) loans, yet $3.21 billion of the 7(a) money. The count peaked in FY2011 at 618 loans and $396.2 million; FY2025 approved 345 loans for $434.2 million, the most 7(a) veterinary dollars of any year in the table, on far fewer approvals. FY2010 and FY2018 make the same point from another angle: both years total $342.9 million, on 522 loans in the first and 372 in the second. For a feasibility study, the long series is a poor guide to leverage. A practice financed now typically carries a larger loan than one financed in the 1990s or 2000s, so the comparables for loan size and coverage should come from the recent decade, and a study that cites older years should say why.

The 7(a) count fell to its FY2023 low

The 7(a) count climbed from 151 in FY1991 to 343 in FY1997, reached 520 in FY2005 and 618 in FY2011, then held between 438 and 496 from FY2013 through FY2017. It then slid: 372 in FY2018, 276 in FY2019 and 238 in FY2020. After a rebound to 348 in FY2021, approvals fell to 236 and then to 179 in FY2023, the fewest of any year after FY1991. The money did not fall with them. FY2023's 179 loans totaled $260.0 million, more than the 520 loans of FY2005 at $249.1 million, and no year since FY2017 has dropped below FY2020's $222.3 million. Recovery came in FY2024 with 246 loans and in FY2025 with 345, and FY2026 ended at 231 loans and $272.9 million. Lenders kept financing veterinarians through the low years, but on fewer and larger files, so a new request is weighed against a thinner set of recent approvals, each of them sizeable, and the study has to show why this practice belongs among them.

504 peaked in FY2005 and has not come back

The 504 series rose from 17 loans in FY1991 to 138 in FY2005, its highest count, and stayed between 104 and 138 through FY2010, when it approved 129. Then it broke away from 7(a): in FY2011, the year 7(a) set its record of 618, 504 fell to 82, and by FY2014 it was down to 34. Since FY2010 the 504 count has not risen above 92, a level it reached in FY2012 and again in FY2021. FY2025 approved 30 loans and FY2026 27, the fewest since the 19 of FY1993. In this trade 504 is the minority program, and it runs on its own cycle. A veterinary owner who wants to buy or build the clinic under 504 is asking for a loan that SBA approved 27 times nationwide in FY2026, so the study must hand the reviewer the real estate case in full: what the building is worth to the practice, and its value to a different tenant should the clinic close.

FY2021, the year both programs jumped

FY2021 stands out in both series. 7(a) rose from 238 loans in FY2020 to 348 for $430.3 million, and 504 from 62 to 92 loans for $85.9 million, the most 504 veterinary dollars of any year, above FY2010's $67.6 million and FY2007's $67.0 million. After that, 504 approvals fell to 63, 43, 46, 30 and 27, while the dollars held up better at $59.3 million, $48.9 million, $53.3 million, $28.2 million and $36.8 million, with FY2026's 27 loans carrying more money than FY2025's 30. FY2021 alone accounts for 92 of the 496 loans 504 approved in the decade. A study that uses the decade's 504 record as its benchmark is leaning on one strong year, and should test the request against the thinner years that followed rather than against FY2021's volume.

Through FY2008 and FY2009

The downturn years left only a small mark on veterinary lending. 7(a) approvals went from 418 loans and $289.6 million in FY2008 to 368 and $241.5 million in FY2009, then jumped to 522 and $342.9 million in FY2010 and to the series high of 618 in FY2011. 504 held at 120 loans in FY2008 and 104 in FY2009, with $66.8 million in each year. Approvals measure credit, not client visits, but they show lenders kept approving veterinary loans through those years. That shapes the downside case in a veterinary study: the stress worth modeling is specific to the practice, such as an associate who resigns, a seller whose clients follow the seller out, a new hospital opening nearby or a slower ramp, rather than a market-wide freeze in veterinary credit.

What the counts include

Every year in this table counts gross approvals, cancelled approvals among them, and where SBA's coding of the borrower's industry is incomplete in a given year, that year's veterinary figure is a floor. The decade totals of 2,941 7(a) loans and 496 under 504 therefore measure what lenders agreed to finance, not what they funded; the program table further down puts the cancelled portion at no less than 11.7% for 7(a) and 18.0% for 504. A study should cite these counts as lender demand for veterinary credit, and should not present them as the number of clinics that opened or changed hands.

Los Angeles-Long Beach-Anaheim against the states

Los Angeles-Long Beach-Anaheim has 129 veterinary loans and $196.3 million at a $1.0 million median. Its loan count exceeds every state except California, Florida, Texas, Ohio and Pennsylvania, and its dollars exceed every state except California, Florida and Texas. Within California the metros differ sharply: Riverside-San Bernardino-Ontario has 48 loans at $783,350, San Francisco-Oakland-Fremont 42 at $1.0 million with $79.4 million, San Diego-Chula Vista-Carlsbad 31 at $405,100 with $22.8 million, and Sacramento-Roseville-Folsom 28 at $1.5 million with $47.2 million. California's state median of $941,000 sits between them and is a poor stand-in for San Diego or Sacramento. A California study should be benchmarked to its metro row, a San Diego purchase against $405,100 and a Sacramento project against $1.5 million, and with 129 loans behind it, the Los Angeles market obliges the trade area work to count every clinic a new one would compete with.

Dallas, Houston and Austin

Dallas-Fort Worth-Arlington (69 loans, $106.4 million, $980,000 median) and Houston-Pasadena-The Woodlands (68 loans, $80.7 million, $967,000) are nearly level on count and median, but Dallas carries more money. Austin-Round Rock-San Marcos has 34 loans and $59.8 million at a $1.5 million median, the highest of any metro on this page, shared with Sacramento-Roseville-Folsom; no floor is reported for it, its cohort being under 30 loans. All three sit above the national medians, and the Texas state median is $959,500. In Austin a million-dollar request is below the metro's middle loan; outside these metros the Texas row is the only benchmark this page offers. The study must place the request in the right setting and show the revenue that supports a loan of its size there.

Florida's metro spread

The Florida metros on this page cover a wide range. Miami-Fort Lauderdale-West Palm Beach has the most loans, 72, but the lowest median, $569,000, with $70.1 million. Tampa-St. Petersburg-Clearwater has 52 loans at $645,500 and $61.9 million; Orlando-Kissimmee-Sanford has fewer loans, 45, yet more money, $62.1 million, at a $1.1 million median; Jacksonville has 36 loans and $59.8 million at $1.0 million, the same money Austin-Round Rock-San Marcos shows. The Florida state median of $775,000 falls inside that range. A Miami practice purchase and an Orlando project at the metro's $1.1 million median are different credit, and the study must use the metro that matches. In Miami, where lending is dense and tickets smaller, the count of competing clinics matters most; in Orlando and Jacksonville, where loans run larger, the building and the coverage after owner pay carry more of the weight.

One metro, most of a state

In several states one metro carries the bulk of the veterinary record. Atlanta-Sandy Springs-Roswell has 76 of Georgia's 122 loans and $74.3 million of its $131.8 million, at a $773,000 median beside the state's $772,500. Denver-Aurora-Centennial has 60 of Colorado's 111 loans at $1.1 million. Phoenix-Mesa-Chandler has 54 of Arizona's 87 at $811,650, below the state's $930,000, which points to larger loans outside Phoenix. Philadelphia-Camden-Wilmington, which reaches into New Jersey, Delaware and Maryland, has 54 loans and $86.8 million at $973,500, far above Pennsylvania's $559,000, while Pittsburgh's 32 loans at $558,000 sit right on the state figure. Where one metro dominates, the state row is largely that metro's record, and a study for a project elsewhere in the state must show how its own market differs.

Metro rows against state rows

New York-Newark-Jersey City shows 95 loans and $108.5 million at a $643,000 median, more money than all of New York State's 120 loans and $108.0 million, whose median is $333,000; the metro reaches into New Jersey, where 67 loans run at a $700,000 median. Boston-Cambridge-Newton's 45 loans run at $356,000 against the Massachusetts median of $273,500, and Chicago-Naperville-Elgin's 58 loans at $730,500 against Illinois's $451,700. Kansas City's 33 loans at $766,000 sit above both states it spans, Missouri at $585,850 and Kansas at $371,600; St. Louis has 30 loans at $609,750, Detroit-Warren-Dearborn 25 at $506,000 against Michigan's $434,000, and Cleveland and Columbus sit above Ohio's $301,800. Minneapolis-St. Paul-Bloomington is the exception, its 41 loans at a $331,000 median, the same as Minnesota's. The large metros mostly lend larger than their states, so a metro practice should be benchmarked on its metro row, while a practice in a smaller market should not borrow a metro benchmark; the study shows which row the project resembles and why.

What the metro rows leave out

No metro on this page carries a charge-off floor: each is withheld, and Austin's cohort is too small to report. There is no metro loss rate here for a study to quote, so it falls back on the state floor and names it as such. San Juan-Bayamón-Caguas is the low outlier, with 33 loans and $7.2 million at a $143,000 median, the lowest of any metro here, out of a Puerto Rico record of 44 loans and $8.2 million. Washington-Arlington-Alexandria (39 loans, $669,000) and Seattle-Tacoma-Bellevue (37 loans, $740,000, below Washington's $876,900) show that a metro median can fall on either side of its state's. A metro count measures how often lenders financed veterinary practices there; it does not count clinics, and the study still has to find and count the competitors in the trade area.

Matching medians, unequal ranges

The two programs' medians are nearly the same, $619,100 for 7(a) and $626,500 for 504, but their ranges are not. The 7(a) quartiles run from $200,000 to $1.6 million, the 504 quartiles from $328,500 to $1.1 million, so the 504 interquartile band falls wholly within the 7(a) one. 7(a) reaches lower and higher; 504 holds to a mid-sized band. The study's first task is to place the request in this spread. A 504 request above $1.1 million is in the program's top quarter for veterinary loans, a 7(a) request under $200,000 in its bottom quarter, and each position brings its own questions from the reviewer: at the top, whether the building and the practice justify the size; at the bottom, whether the owner's draw leaves enough to pay the loan.

Where the 7(a) money sits

By count, 7(a) veterinary lending spreads across the bands: 739 loans over $350,000 to $1 million, 680 at $150,000 or less, 557 over $1 million to $2 million, 527 over $2 million to $5 million and 438 over $150,000 to $350,000. By dollars it concentrates: the 527 loans over $2 million to $5 million hold $1.75 billion, more than all the lower 7(a) bands put together, against $804.2 million in the band below, $482.7 million in the most crowded band and $53.5 million among the 680 smallest loans. No 7(a) veterinary loan exceeds $5 million; that band shows 0 loans and $0. The large acquisitions decide how much veterinary exposure a lender carries, so a request above $2 million draws the closest reading of the study's market and staffing evidence.

504's middle bands

504 is weighted toward the middle. Its most crowded band, over $350,000 to $1 million, holds 220 loans and $139.9 million, and the next band up has 101 loans and $137.4 million, nearly the same money on fewer loans. There are 112 loans over $150,000 to $350,000 ($27.7 million) and 43 over $2 million to $5 million ($125.6 million). At the bottom, 19 loans sit at $150,000 or less, their dollar total withheld, and above $5 million the table shows 1 loan, its dollars not shown because the band holds fewer than 5 loans. A 504 veterinary loan is a real estate loan of moderate size, and the study for it is read beside an appraisal: the building has to suit the practice, and the reviewer will ask what it is worth to someone else.

Cancellation is the 504 risk

The program table shows where each program's risk lies. Among veterinary approvals, 504 carries the higher cancellation floor, 18.0% to 11.7% for 7(a); on charge-offs the order flips, with veterinary 504 loans at 0.00% to date and within 5 years alike, and 7(a) at 1.1% and 0.40%. The cancellation floor is measured on approvals from FY2017 through FY2024, the charge-off floor on loans disbursed from FY2017 through FY2021, and on both measures a 504 veterinary deal is more likely to die before funding than to fail after it. A study prepared for a 504 project can reduce that risk by resolving early what can reopen a building purchase: an appraisal short of the price, a construction budget without contingency, seller terms that shift, or an environmental finding.

Loss timing in 7(a)

For 7(a), the floor within 5 years, 0.40%, sits below the to-date floor of 1.1% for FY2017 to FY2021 loans, which suggests that part of the recorded losses came after the early years. That bears on the study's projection period: a veterinary practice's risk does not end once the seller has handed over and the ramp is complete, and the study should carry its coverage test into the years when a lease renews, imaging or surgical equipment needs replacing, or a key associate may leave. At the small end, the 680 smallest 7(a) veterinary loans hold $53.5 million in all; for loans of that size the study is lighter, and the client base and coverage test do most of its work.