SBA 504 Assisted Living Feasibility Study

Where assisted living sits in the 504 record

SBA's loan-level files show 505 assisted living loans approved under the 504 program from FY2017 to FY2026, for $640.9 million in gross dollars. The median loan is $807,000; half of all these loans fall between $379,000 and $1.7 million. None of this cell's measures clears our distinctness margin against its parents, the 504 program across every asset class and assisted living across both SBA programs, so the national record reads close to both. That makes the detail more useful than any headline. Annual volume stayed in a narrow band, from 37 loans in FY2019 to 65 in FY2025, while dollars jumped to $100.5 million on 61 loans in FY2026, the largest dollar year in the series. Projects are getting bigger faster than they are getting more numerous.

For a borrower, a 504 assisted living loan is real estate finance: the CDC's debenture sits behind a bank first lien on an owner-occupied building, and the operator brings equity. Franchise brands are rare here, at 3.0% of loans, so most projects rest on what the operator has already run, not on a franchisor's playbook. Among the CDCs that SBA reports as current holders, Florida First Capital Finance Corporation, Inc. leads with 37 loans and $82.0 million, followed by WBD, Inc. (33 loans, $29.9 million) and The Mortgage Capital Development Corporation (32 loans, $47.7 million). Florida Business Development Corporation and Mountain West Small Business Finance hold 30 each. By state, California leads with 77 loans, then Florida with 65, Minnesota with 48 and Wisconsin with 38.

Cancellation and charge-off floors

Cancellation is the larger risk here. At least 15.3% of loans approved in FY2017 through FY2024 were cancelled after approval; counting loans still undisbursed as cancelled, the share could reach 20.1%. That is the figure a borrower should study, because a meaningful share of approved assisted living projects never fund. The charge-off floor is 0.56% across the 179 loans that disbursed in FY2017 to FY2021, and no loan in that group, 0.00%, was charged off within five years of approval. Losses are low; the risk in this cell sits before closing, not after it. Both rates are floors, so the true rates may be higher but not lower.

What a 504 assisted living study must test

The class has a coding gap a lender should know about. Only assisted living without on-site nursing has its own industry code, and memory care has none, so a memory care wing has no separate record anywhere. Assisted living with nursing falls instead into the skilled nursing and continuing care classes. A feasibility study for a 504 assisted living project therefore has to test demand in the primary market area by age and income, not by any national count; the construction or renovation budget against the loan sizes above; staffing cost, which drives margin more than rent does; debt service coverage through lease-up, while occupancy is still building; and the appraisal, where an MAI has to separate the real property from the going-concern value of the operating business, since the 504 debenture lends against the real estate.