Assisted Living Feasibility Study in Florida

Florida's care-home approvals fall through more often

What separates Florida's assisted living record from both the rest of Florida's SBA lending and the class nationally is how often an approved loan never funded as approved. At least 19.1% of Florida approvals from FY2017 through FY2024 were later cancelled; treat every loan still waiting on its money as cancelled and the share reaches 19.6%. On this measure the Florida figure clears our distinctness screen against both comparisons. Florida is also a heavy user of the class: 277 loans and $344.1 million approved from FY2017 to FY2026 rank it 2 of 50 among states, and a location quotient of 1.39x shows care homes taking a bigger slice of Florida's SBA lending than they take nationally, though inside Florida the class places only 14 of 39.

Ticket sizes, the 504 lenders and the counties

Florida's median loan of $709,000 is 0.93x what the class borrows nationally at the midpoint, and the central half of Florida approvals sits between $311,000 and $1.8 million, a band that holds both the refit of a small licensed home and ground-up construction of a larger one. SBA 7(a) carried 212 of the loans and SBA 504 carried 65, and franchised operators account for only 2.5%, so lenders are underwriting an operator and a building, not a brand. Florida First Capital Finance Corporation, Inc. holds the most 504 loans, at 34 worth $75.1 million; Florida Business Development Corporation follows at 27 loans and $32.2 million. Among 7(a) lenders North State Bank holds 27 loans for $24.2 million, while Celtic Bank Corporation's 21 add up to $35.6 million. Broward County has 31 loans, Pinellas 28, Volusia 26 and Hillsborough 24, with Miami-Dade at 18.

Closing risk outweighs repayment risk

For a borrower, a cancellation floor at this level says the commitment letter is where the hard part begins. Florida deals in this class have unravelled between approval and funding often enough to matter, so licensing, the construction budget, the equity injection and the appraisal all need settling before terms are signed. Repayment has been far steadier: among the 108 Florida care-home loans funded in FY2017 to FY2021, just 0.93% have been charged off so far, and the same 0.93% failed inside five years of approval. Each figure is a floor, since loans still on the books can yet go bad, but the record places a lender's risk at the closing table more than in the years after it.

A Florida study for an assisted living project has to test demand, cost, coverage and value, in that order. Demand means the private-pay seniors within the home's real draw area, county by county, and the licensed capacity already competing for them. Cost, for conversion or new building, is tested against where most Florida loans actually land, with a schedule contingency. Florida debt service coverage has to be proven at a stabilised census reached after a believable fill-up period, not at opening. Finally, the income and value conclusions must line up with the appraisal, because a lender values a care home on its licensed beds and operating income.

One coding boundary applies throughout. Only assisted living with no nursing on site is coded on its own, and memory care has no code at all; homes that add nursing are indexed with nursing facilities and continuing care communities, so their loans sit in those classes and not on this page.