SBA 504 Skilled Nursing Feasibility Study in California

First among states, in a thin cell

In SBA 504 lending to skilled nursing, California leads every other state (1), yet the class holds only 22 of 39 within California asset types and the file counts 35 approvals from FY2017 to FY2026. Those loans total $58.2 million, with a median of $1.1 million that comes to 1.06x against skilled nursing elsewhere under 504, and a central half reaching from $564,500 to $1.9 million. These are building-scale loans, and no franchise brand is involved: 0.00%.

Who holds them and where

The Mortgage Capital Development Corporation is named holder of 19 loans worth $36.2 million, and Business Finance Capital of 8 loans worth $10.0 million, so two corporations carry the file. Los Angeles County has 5 loans, Alameda has 4, and Orange, Sacramento and San Bernardino each have 3. The timing is striking: FY2026 shows 11 loans and $22.0 million, the largest year by far, compared with 1 in FY2025 and 1 in FY2017.

Rates and scope

Neither outcome rate appears for this cell: its early cohorts are too thin, so cancellation and charge-off are withheld, not zero. The industry code folds inpatient hospices and nursing-supported assisted living into the same line as skilled nursing, so those care types are inside the cell too.

What the study for a California facility must test

Nursing facilities depend on payers more than on private demand. The study has to set out the mix of Medicare, Medicaid and private pay, the reimbursement rate for each, and any expected changes. State licensure, the certificate or approval to add beds, and staffing minimums limit the plan, and labor is the main expense. The study should count existing beds in the service area, occupancy at competing facilities and referral relationships with hospitals. Capital cost is large; at a $1.1 million median with some loans much larger, a lender will examine construction or purchase price per bed. Debt service must be covered at an occupancy below the target, and the appraisal will require a going-concern valuation, since the real estate has a narrow use. Because the code mixes in hospice and assisted living with nursing, the study should say precisely which services the project provides.