SBA 7(a) Assisted Living Feasibility Study in Arizona

Credit unions in front, losses modest

Arizona's assisted living homes without on-site nursing borrow under SBA 7(a) through a field led by credit unions. America First Federal Credit Union has 25 loans and Arizona Financial Credit Union 24. Across FY2017 to FY2026 the program approved 174 loans worth $162.6 million in gross dollars. Arizona holds fourth place nationally by loan count, and the class stands ninth of 39 at home. The median loan, $695,000, is 0.92x the nationwide median, with $350,000 to $1.3 million covering the middle of the book. Franchising reaches only 3.4%.

Outcomes

Care-home approvals through FY2024 were cancelled at 7.3% or more, and counting undisbursed loans leaves that unchanged. In the cohort of 100 funded loans, the charge-off floor is 2.0% so far, and the five-year measure shows 2.0% as well. Open loans remain, so both are floors. The figures sit low for a class built on licensed beds and long ramp-ups.

Holders and counties

Behind the two credit unions come Wells Fargo Bank National Association with 15 loans worth $5.7 million, Alerus Financial, National Association with 13 worth $11.3 million and Live Oak Banking Company with 11 worth $16.2 million, the largest sum per loan of the group. These are present holders as SBA reports them. Maricopa County has 138 loans and Pima 21, then Pinal with 5 and Yavapai with 4. Approvals peaked at 34 in FY2021 and fell to 8 in FY2025.

What the code leaves out

SBA's code picks out only homes without nursing staff on site. No code exists for memory care, and operators who employ nurses appear under other health classes, so a mixed-acuity project belongs on those pages as well.

Testing an Arizona care home

The study must say whether the loan funds a conversion, a new build or an acquisition of a licensed home. Arizona draws retirees, but that is no proof for a particular submarket: the study must count seniors able to pay private rates within a realistic drive, the licensed homes already serving them, and the time beds take to fill. Operating cost, especially staffing, belongs in the forecast even though the loan figures do not show it. Show the payment covered at stabilised census and again under a slow lease-up. Appraisers look to the income licensed beds earn, which makes revenue assumptions the point on which a loan stands or falls.