Assisted Living Feasibility Study in Wisconsin

A heavy share of SBA lending, a smaller typical loan

Wisconsin leans on SBA credit for assisted living without nursing care more than most states do. Its 112 approvals from FY2017 to FY2026 rank 6 of 50 among states and carried $108.2 million in gross dollars, and a location quotient of 2.01x says the class takes a far larger slice of the Wisconsin SBA book than it does of the national one. Inside the state it ranks 13 of 39 classes by count. The metric that sets this cell apart is loan size. The median Wisconsin approval is $549,000, only 0.72x the national median for the class, and our screen finds it outside the margin against both the Wisconsin median across every class and the national median for assisted living. In plain terms, Wisconsin finances many care homes, and finances them in smaller pieces than the class does elsewhere.

The spread of loan sizes tells a lender what kind of deals these are. The middle half runs from $177,500 to $1.4 million, so the file holds both modest working capital or equipment requests and loans large enough to carry a building. SBA 7(a) accounts for 74 loans and SBA 504 for 38, and the 504 side is concentrated: WBD, Inc. holds 33 of those loans, worth $29.9 million. Bank Five Nine leads 7(a) with 16 loans and $17.2 million, while Wisconsin Women's Business Initiative Corporation holds 7 loans totalling $1.0 million and Oostburg State Bank 5 loans for $1.8 million. Franchising is close to absent at 2.7% of loans, which means credit rests on the operator's record and the property rather than a brand. Milwaukee County leads with 26 loans, ahead of Washington and Waukesha at 8 each and Dane and Sheboygan at 6 each.

Cancellation and loss floors for Wisconsin care homes

Of Wisconsin care-home approvals from FY2017 through FY2024, 9.9% at minimum fell away after approval, a share that climbs to 11.0% if loans still waiting on disbursement are treated as cancelled. Losses are real but slow: of the 55 loans that funded in FY2017 to FY2021, 5.5% are already written off, against 1.8% within five years of approval, which says part of the damage arrived after the fifth year. Both are floors, since open loans can still fail. Volume has swung, from 5 loans in FY2020 to 20 loans and $24.6 million in FY2021, and FY2025 brought 13 loans for just $5.3 million.

Testing a Wisconsin care home before the loan

The study has to establish demand from older Wisconsin households able to pay privately, county by county, measured against the homes already licensed nearby. It has to test the build or conversion budget against a request that may sit well below the national norm, and carry debt service coverage through a realistic fill-up to a stable census, since part of the losses in this cell surfaced only after year five. The appraisal should reconcile with licensed capacity and operating income. One coding limit matters: only homes without on-site nursing have their own code, memory care has none, and a project that adds nursing care will be counted with skilled nursing and continuing care facilities rather than in these figures.