Model Case Study: Rural Urgent Care Acquisition, Duncan, Oklahoma, USDA B&I

A buyer proposes to acquire a listed, operating 5,256 SF urgent care building in Duncan, Oklahoma for $2,299,000 as a going concern, finance it with a USDA Business and Industry guaranteed loan, and lift Medicare and Medicaid revenue by certifying the clinic as a Rural Health Clinic. With RHC billing the modeled operation covers debt service 1.07x at the asking price in Year 1; without it, 0.36x. The site very likely fails the RHC location test. One eligibility determination is worth $205,200 a year of revenue and the difference between a financeable deal and none.

This is a model study. The building is a real listing used for its public facts (address, area, asking price, listing description); the operation is modeled from public benchmarks and labeled model assumptions, not from the seller's statements, which a B&I lender would require and underwrite as historical cash flow for an existing business. No client data was used. Every figure on this page traces to a cell in the workbook.

As proposed, the buyer pays the $2,299,000 ask and plans to bill Medicare at the Rural Health Clinic all-inclusive rate, $165 per visit for CY 2026 against a fee-schedule visit near $100, and Medicaid at SoonerCare's all-inclusive RHC fee. The RHC uplift is $22.80 per visit on the modeled payer mix and $205,200 of Year 1 revenue at 9,000 visits. With it, cash available for debt service is $262,669 against $245,921 of debt service, a DSCR of 1.07x in Year 1 that reaches 1.23x in Year 3; the 1.25 times convention needs 9,383 visits, which is 97.7 percent of the volume the seller reports. The case is marginal even on its own terms, and its terms are not available: new RHC certification requires a location outside a 2020 Census Urban Area, any place with 5,000 or more residents or 2,000 or more housing units is now an Urban Area, and Duncan had 22,692 residents in 2020 with an 89.7 percent urban share. The uplift cannot be booked until a HRSA Federal Office of Rural Health Policy address check and the CMS regional office clear it, and the evidence says they will not.

As restructured at the asking price, the clinic bills the fee schedule. Net revenue per visit is $114.50 on a payer mix of 18 percent Medicare, 30 percent Medicaid, 42 percent commercial and 10 percent self-pay in a Medicaid-expansion state. Year 1 EBITDA after the owner-occupied building cost is $113,249, cash available after the replacement reserve is $88,249, and DSCR is 0.36x. At the 1.25 times convention that cash flow supports about $604,336 of debt and an acquisition price near $525,726; the fee-schedule operation does not carry the real estate, let alone the business value in the ask.

At the price the cash flow supports with RHC billing, the workbook solves the acquisition price at which Year 1 DSCR equals 1.25 times, holding the real estate and business split at the asking-price proportion. That price is $1,937,048, $369 per SF and 84.3 percent of the ask. The loan is $1,751,865, debt service $210,135, and DSCR rises from 1.25x to 1.64x by Year 5. Take RHC billing away at that price and coverage falls to 0.42x. The deal is financeable at $1,937,048 if, and only if, the location determination comes back favorable, which on the evidence it will not at this address.

The solved price is a model result, not an opinion of value. A buyer would underwrite from the seller's trailing statements and an appraisal that separates the real estate from the business and equipment; the model's purpose is to show which input decides the answer, and here it is a map, not a margin.

Duncan is the Stephens County seat in southwestern Oklahoma, with a population of 22,692 at the 2020 Census. Stephens County carries a primary care HPSA score of 11 and a partial-county Medically Underserved Area designation on the State Department of Health's chart, which supports need but does not confer RHC eligibility. Three urgent care operators serve the city, including the subject and a multi-state chain location on US 81 that is open seven days with x-ray, EKG and labs and accepts Medicare and Medicaid, which puts the city at about 7,564 residents per center on a city-only basis and argues for a county-wide draw assumption. Duncan Regional Hospital, an independent 110-bed nonprofit, reports a median emergency department time of 148 minutes and a left-without-being-seen rate of 1 percent against a 2 percent Oklahoma average, so the local emergency department is not congested and diversion upside is modest.

Oklahoma expanded Medicaid effective July 2021, which supports a higher insured share than a non-expansion comparable. The seller reports about 800 visits a month; the model carries 9,000 visits in Year 1 as a haircut to that unaudited figure, growing 2 percent a year.

The B&I guaranteed loan to a new business carries a 20 percent tangible balance sheet equity requirement under Table 1 to 7 CFR 5001.105(d), an 85 percent guarantee for applications under $5,000,000 under the FY2026 OneRD notice as reported (some lender materials still cite 80 percent), a 3 percent initial guarantee fee on the guaranteed amount, and a 0.55 percent annual retention fee on the guaranteed outstanding balance that the lender pays and prices into the rate. A guaranteed loan greater than $1,000,000 to a new business requires an independent feasibility study acceptable to the Agency under 7 CFR 5001.306(a)(3)(i). The coverage ratio follows the 7 CFR 5001.3 definition, EBITDA less reasonably expected replacement capital expenditures divided by annual debt service; USDA publishes no minimum for a purchase, 1.1 times historical applies to refinancing, and the 1.25 times used here is a lender convention. The note is modeled at prime plus 2.00 percent, or 9.00 percent at the 7.00 percent prime set on September 17, 2026; real estate amortizes over 25 years and the equipment, business value and working capital tranche over 10. The B&I treatment of intangible business value within the price is a structuring point to confirm against 7 CFR 5001.105 and 5001.118 before application.

The real estate is allocated at $300 per SF, a model assumption to be replaced by the appraisal; the balance of the price is equipment and business value.

Staffing is five positions totaling 7.8 FTE, loaded, with an advanced practice provider on shift twelve hours a day, seven days, which the RHC rules would require at least half of operating hours and which the schedule needs regardless. Wages are model assumptions pending Bureau of Labor Statistics OEWS data for southwestern Oklahoma. Billing, marketing and supplies are carried at 15 percent of collections. Expenses inflate 3 percent a year and rates grow 2 percent.

Scenario C is tested in Year 1 because the acquisition price is sized there.

Contribution per visit with RHC billing is $116.70. Losing RHC billing moves coverage by more than every other sensitivity combined, and it turns on a location test rather than on anything the operator controls.