Assisted Living Feasibility Study in Michigan

A smaller ticket than assisted living elsewhere

Michigan's assisted living operators borrow well under what their counterparts nationally borrow, and that is what sets this cell apart. The median SBA loan for a Michigan home without nursing care was $450,000, only 0.59x the national median for the class. Of the gauges we screen, only loan size separates these homes, past the margin we require, from Michigan lending in every class and from assisted living nationwide, so we lead with it. From FY2017 to FY2026 the state saw 97 approvals carrying $67.6 million, and the middle half of them fell between $180,000 and $801,900. A band at that level suggests smaller homes, residential conversions and purchases of going concerns rather than large purpose-built campuses.

Volume reads differently from size. Michigan ranks 7 of 50 states by the number of these loans, yet its location quotient of 0.96x says the class takes almost exactly the slice of Michigan's SBA lending that it takes nationally, and inside the state it stands only 18 of 39 among classes. SBA 7(a) carried 72 of the approvals and SBA 504 carried 25. The franchise share is 0.00%, so a lender here underwrites an independent operator with no brand system's numbers behind it. The Huntington National Bank is the current holder of 22 of the 7(a) loans, worth $13.6 million; Live Oak Banking Company holds 8, worth $7.1 million, and Team One CU holds 5. Oakland County leads with 14 loans, Wayne follows with 9 and Eaton with 8, while Ionia shows 6.

Cancellations and losses on Michigan care homes

Of Michigan approvals made from FY2017 through FY2024, at least 8.8% were cancelled after approval, and treating every loan still undisbursed as cancelled lifts that to a ceiling of 10.0%. A cancellation usually means the deal did not reach closing in the shape the lender approved, often because licensing, the purchase price or the appraised value moved. Losses so far are modest: 2.2% of the 45 loans disbursed in FY2017 to FY2021 have been charged off to date, and the same 2.2% within five years of approval. Both are floors, because open loans in that group can still fail.

What a Michigan study has to prove

We would size a Michigan assisted living study to the smaller ticket this record shows. Demand has to be counted county by county among private-pay seniors, since the approvals gather in Oakland and Wayne but also reach Midland, Saginaw and Genesee. Cost should be tested against a typical loan of $450,000, and a project nearer $801,900 has to show what it buys that the median home did not. Debt service coverage belongs at a stabilised census after an honest fill-up period, and the appraisal needs support from the licensed bed count and the home's own operating income.

One coding limit governs every figure above. Only homes with no on-site nursing carry this code, memory care has no code of its own, and a Michigan home that adds nursing is counted with skilled nursing and continuing care retirement communities, so a mixed-care project may find its true peers outside these numbers.