Veterinary Clinic Feasibility Study in Arizona

Arizona veterinary loans run large

Arizona's veterinary clinic loans are large: the median of $930,000 is 1.50x the national midpoint for the class, and the middle half runs from $312,000 to $1.6 million. Clinics weigh more in Arizona's SBA lending than nationally (location quotient 1.24x), place 14 of 39 among Arizona classes, and put the state 12 of 53 on 87 loans and $102.0 million over FY2017 to FY2026. Size, cancellation and loss figures come next.

Program mix and lenders

Of the 87 Arizona loans, 78 used 7(a) and 9 used 504. Live Oak Banking Company holds 13 for $20.1 million, PNC Bank, National Association 9 for $10.6 million and Banc of California 8 for $20.0 million; Wells Fargo Bank National Association holds 6 and United Community Bank 5. Arizona Capital Source holds 6 of the 504 loans. Franchised clinics account for 3.4%. Maricopa County has 53 loans and Pima 13, with Coconino and Yavapai at 5 each. Approvals have slowed, from 11 to 13 a year in FY2017 to FY2021 to between 4 and 6 a year since FY2022.

No Arizona losses so far

Arizona's 51 clinic loans funded in FY2017 to FY2021 have produced no charge-offs, 0.00% on both the to-date and five-year measures, which stays a floor while they remain open. Arizona cancelled at least 16.0% of its FY2017 to FY2024 clinic approvals, and 17.3% at the ceiling. For a lender or borrower, the cancellation floor is the larger number to plan around.

An Arizona veterinary study has to test pet-owning households and income in the draw area, the general and emergency hospitals already serving Maricopa, Pima or the site's county, and, for a purchase, the practice's active clients, revenue per veterinarian and the retention of associate doctors. Cost covers acquisition or build-out and equipment. Maricopa County has 53 of the 87 loans, so a study should say whether the site sits there or in one of the smaller counties. Coverage on a loan near $930,000 has to hold after market-rate pay for the owner veterinarian. The appraisal will value an owned clinic as specialised medical space, and the study needs a figure for what another user would pay. No coding caveat applies to veterinary clinics.