Assisted Living Feasibility Study in California

California leads the country in this class

No state approved more SBA loans for assisted living without nursing care than California: its 583 approvals from FY2017 to FY2026 rank 1 of 50 among states and carried $768.5 million in gross dollars. The location quotient of 1.68x tells a lender that this class takes a larger slice of California's SBA book than it takes of the national book, even though it sits only 14 of 39 among classes inside the state. The median loan of $851,000 is 1.12x the national median for the class. Our distinctness screen asks whether the typical loan size or either outcome rate sits apart, by a set margin, from both the statewide record across every asset class and the national figures for assisted living; this cell does not pass it, so what marks it out is volume and concentration rather than a different kind of loan.

Who lends, how much, and where

The middle half of approvals runs from $535,000 to $1.6 million, a band that usually means property or a substantial build-out is in the deal, not working capital alone. SBA 7(a) carried 506 of the loans and SBA 504 carried 77, and franchising barely registers at 0.34% of loans, so underwriting rests on the operator and the building rather than on a brand system. Pinnacle Bank holds 138 of the 7(a) loans, worth $153.1 million, well ahead of Celtic Bank Corporation at 34 and Columbia Bank at 28. Among certified development companies, 19 loans put The Mortgage Capital Development Corporation first. Sacramento County, with 78 loans, edges Los Angeles County at 75.

Cancellations, charge-offs and the study

Of California care-home approvals made from FY2017 through FY2024, 9.9% or more were later cancelled; if every loan still waiting on its money is counted as cancelled too, the ceiling is 10.7%. For a borrower this is the share of approved care-home deals that did not close as approved, which argues for settling the licensing path, the construction budget and the appraisal before the commitment letter. Losses have been light: 0.73% of the 275 care-home loans disbursed in FY2017 to FY2021 are charged off so far, and 0.36% inside the first five years. Open California loans can still fail, so treat both as minimums.

A feasibility study for an assisted living home in California therefore has to prove demand among older residents who can pay privately in the specific county, test the construction or conversion cost against a ticket that typically lands near $851,000, and show debt service coverage at a stabilised census with an honest fill-up period, since a loan near the $1.6 million top of the middle half leaves the least room for a slow ramp. It also has to support the appraisal: the lender's value will rest on licensed capacity and operating income, and the study's forecast should reconcile with both.

One coding limit shapes every number here. Assisted living gets a code of its own only when no nursing is provided on site; memory care has none, and any California home that adds nursing care lands in the skilled nursing or continuing care retirement figures, not here.