Veterinary Clinic Feasibility Study in Alabama

A modest ticket in a state that leans toward animal clinics

Across FY2017 to FY2026 SBA put its guarantee behind 33 Alabama veterinary clinic loans, worth $28.2 million in gross dollars. Alabama ranks 33 of 53 states for the class, a mid-table position, yet the location quotient of 1.34x says animal hospitals take a bigger share of Alabama's SBA lending than they do nationally. Inside the state, the class sits 14 of 39 among asset classes. The median loan of $468,000 is only 0.75x the national median for veterinary clinics, so the typical Alabama deal is smaller than a typical clinic loan elsewhere, even as the class is relatively common here.

What the loans look like

Half of the loans fall between $133,000 and $1.3 million. SBA 7(a) accounts for 27 of the loans and SBA 504 for 6. Franchising plays almost no part, at a 3.0% share. The Huntington National Bank leads the 7(a) lenders with 10 loans and $10.9 million. Shelby County leads the geography with 6 loans, the most in any county, so a site elsewhere in Alabama has little local precedent in this record. The median of $468,000 and the middle half from $133,000 to $1.3 million set the reference range for a request. Morgan follows with 4, and Jefferson, Madison and Mobile have 3 each. The yearly count moved from 7 in FY2017 to none in FY2022, then back to 7 in FY2026, so a single year says little.

Floors on cancellation and charge-off

Loan Analytics does not print the cancellation and charge-off rates for this cell, because the cohorts are under 30 loans. Nobody should take the blank as a spotless record: it marks a thin sample, nothing more. Rates in general are minimums, because a loan still open may yet go bad.

For a project here, a feasibility study has to test whether the trade area can carry another clinic: households with pets, the competing practices within a short drive, and the veterinarian supply that will staff it. Build cost or purchase price should be set against a median of $468,000, and debt service coverage shown after a realistic ramp in appointments. The appraisal should value the practice on its earnings, so the revenue forecast must survive that review.