SBA 7(a) Assisted Living Feasibility Study

Assisted living runs mainly through 7(a)

Most SBA assisted living lending is 7(a): 2,232 loans and $2.60 billion from FY2017 to FY2026. The median loan of $752,450 is close to the class median across both programs, as you would expect when 7(a) supplies most of the class, and nothing here clears our distinctness margin. What the page adds is texture. Half the loans land somewhere from $323,750 up to $1.5 million, a spread wide enough to hold both the purchase of an operating facility and smaller loans for working capital or renovation. Volume peaked in FY2021 at 307 loans and $436.0 million, then rose again to 280 loans and $311.8 million in FY2025.

Live Oak Banking Company leads the lender table with 192 loans and $370.1 million, the largest figure in that table on both counts. Columbia Bank has 155 loans for $151.8 million, Pinnacle Bank 138 for $153.1 million, Celtic Bank Corporation 117 for $205.0 million and Wells Fargo Bank National Association 93 for $64.0 million. The state list is led by California with 506 loans, then Washington with 238, Florida with 212, Arizona with 174 and Texas with 148. Franchise operators hold 4.1% of loans.

Few cancellations, some losses

Cancellation is low and tightly bounded here: 10.2% of FY2017 to FY2024 approvals at minimum, and no more than 10.4% even counting undisbursed loans. The cost shows up after funding instead. Of the 971 assisted living loans paid out in FY2017 to FY2021, 1.4% or more have been charged off, and 0.62% inside the first five years; the rest surfaced later. A lender can read that as a modest loss rate on a large cohort. A borrower should read it as proof that a facility can run for years before a staffing or occupancy problem catches up with it.

What a 7(a) assisted living study must test

The industry code covers assisted living without nursing on site. Memory care has no code at all, and facilities that provide nursing are filed under the skilled nursing and continuing care classes, so this record understates senior housing as a whole. Because 7(a) can fund a business purchase, a feasibility study here often supports an acquisition rather than a new build. It has to test demand from seniors in the market who can afford private pay, and the competing licensed units; the staffing plan and its cost; debt service coverage from the facility's actual census and rates, with a case for lower occupancy; and the appraisal, where the MAI splits value into the real property, the furnishings and the operating business, since a lender's collateral is mostly the first.