The Mandate
A practicing dentist acquiring a six-operatory practice from a retiring owner engaged Feasibility Study Consultant to prepare a third-party feasibility study supporting a SBA 7(a) financing request for a project located in King County, Washington. Total project capitalization fell within the $1M-$3M band. The capital provider, a national bank participating in SBA 7(a), required documentation consistent with current program review standards. The analytical question put to the team: Did Bellevue-area patient panel and trailing collections support the acquisition multiple of 78% of trailing collections.
Engagement Scope
- Primary market area defined as a 5-mile drive-time
- Comparable supply set of 14 properties
- Demand model framework: active patient panel retention and procedure-mix capture analysis
- Financial projection horizon: 5 years
- Site inspection completed; operator interviews where applicable
- Primary data collection through field reconnaissance and third-party market data
Methodology Applied
Primary Market Area
The PMA was defined as a 5-mile drive-time from the subject site, calibrated to the demand catchment behavior typical of healthcare assets in Washington. The boundary captured the population, employment, and competitive supply base relevant to the subject's operating thesis.
Supply and Demand Reconciliation
The comparable supply set comprised 14 properties operating within the PMA or in directly substitutable submarkets. Demand was modeled using a active patient panel retention and procedure-mix capture analysis approach over a 5 years horizon. The reconciliation tested whether incremental supply, including the subject, could be absorbed within the projection window without compromising stabilized occupancy assumptions.
Capture Rate Calibration
The subject's capture rate was calibrated against the absorption capacity of the PMA. The analysis concluded that PMA absorption capacity exceeded subject build-out by a factor of 1.5 across the projection window, with a stabilized capture rate of 5.2%.
Exhibit 1: Comparable Supply Set, Washington PMA
[Table or chart rendered in delivered report.]
Exhibit 2: Demand Projection Summary, 5 years Horizon
[Table or chart rendered in delivered report.]
Exhibit 3: Subject Capture Rate vs. PMA Absorption Capacity
[Table or chart rendered in delivered report.]
Analytical Conclusions
- Active patient panel of 2,840 patients with 71% trailing-24-month visit recency confirmed continuity.
- Comparable Eastside dental practices cleared $1.42M to $1.78M annual collections.
- Procedure-mix analysis identified $186,000 in incremental hygiene and restorative capacity.
- Year-three DSCR of 1.58x cleared the SBA 7(a) review threshold.
Deliverable
The delivered report ran 94 pages with 21 exhibits distributed across nine analytical sections, plus appendices documenting comparable supply data, demographic inputs, and financial projection assumptions. The document was prepared to the documentation standards of the national bank participating in SBA 7(a). The corresponding SBA 7(a) review framework guided exhibit selection and supporting documentation.