Assisted Living Feasibility Study in Arizona

Concentration, not a different loan

In assisted living, Arizona's SBA record is shaped less by the size of its loans than by how much of the state's SBA lending the class absorbs. From FY2017 to FY2026, SBA approved 203 loans in Arizona for assisted living homes that provide no on-site nursing, worth $189.4 million in gross dollars, which ranks the state 4 of 50 for this class. The location quotient is 3.63x: care homes take a far larger slice of Arizona's SBA approvals than of the national book, and inside the state they place 7 of 39 among asset classes. The typical ticket matters less than that share. A median loan of $700,000 is 0.92x the national median for the class, slightly below it.

Who financed Arizona care homes

Half of all approvals fall between $347,500 and $1.3 million, a band wide enough to hold both a small conversion and a purpose-built home. SBA 7(a) carried 174 of the loans against 29 under SBA 504, and franchising, at 3.4% of loans, barely figures. Credit unions top the 7(a) table: America First Federal Credit Union holds 25 loans worth $31.4 million and Arizona Financial Credit Union holds 24, with Wells Fargo Bank National Association next at 15. Arizona Capital Source leads the certified development companies with 14. Maricopa County alone accounts for 159 loans and Pima County for 27. Approvals peaked at 36 in FY2021 and were back at 24 in FY2026.

Cancellations and losses

At least 7.2% of Arizona's FY2017 to FY2024 care-home approvals were cancelled after approval, or 7.8% if loans still awaiting disbursement are treated as cancelled. Among the 108 loans that funded between FY2017 and FY2021, 1.9% are charged off so far, with the five-year measure matching it at 1.9%. Open loans can still fail, so a lender should read both as minimums rather than settled outcomes.

For a sponsor, the location quotient is a warning as much as an invitation. A feasibility study for an Arizona assisted living home has to show that its own submarket is not already served by the homes already on the SBA record, counting seniors with the means to pay out of pocket within a practical driving distance of the site. Construction or conversion cost should be tested against a ticket that usually lands near $700,000, and debt service coverage shown at a stabilised census after an honest lease-up, with a slower case beside it. An appraiser will value the home on its licensed beds and the income they earn, so the revenue forecast in the study must be one the appraisal can support.

One coding limit applies throughout. The industry code isolates homes with no nursing staff on site, there is no separate code for memory care, and an Arizona operator offering nursing is filed under the skilled nursing or continuing care classes instead; a mixed-acuity project should be read against those pages too.