SBA 7(a) Assisted Living Feasibility Study in California

The smallest charge-off floor in the group

California assisted living without on-site nursing is the standout for credit performance. Out of 244 loans that disbursed in the oldest cohort, the charge-off floor is 0.82% with 0.41% charged off inside five years of approval. Cancellations are at 10.2%, the same whether undisbursed loans are counted or not. All these are floors. The book holds 506 loans worth $654.6 million, which puts California 1 among states for the program, and within California the class is placed 14 of 39 by asset class.

Large tickets, almost no franchises

The median loan is $890,800, 1.18x the nationwide 7(a) figure for assisted living, and half the loans fall between $561,000 and $1.6 million. Franchise brands account for 0.40% of loans, so the lending goes to owner-operators. Volume peaked at 70 loans and $107.7 million in FY2021; FY2026 stands at 49 loans and $86.3 million, already the second-largest dollar year despite being incomplete, which suggests individual tickets are getting larger.

A concentrated lender field

Pinnacle Bank holds 138 loans worth $153.1 million, far above Celtic Bank Corporation with 34 loans and $60.9 million, Columbia Bank (28 loans, $34.2 million), Wells Fargo Bank National Association (25 loans, $22.5 million) and Harvest Small Business Finance, LLC (22 loans, $26.3 million). SBA's data names the present holder of each loan, and nothing here describes how any of them underwrites. Los Angeles County has 73 loans, Sacramento 70, San Diego 44 and Orange 42, with Placer at 40, Contra Costa at 39 and Sonoma at 28, so northern and inland markets matter as much as the southern coast.

Coding limits and the study

Just the no-nursing version of assisted living is given a code of its own, memory care gets no code at all, while a home that does employ nurses falls into other classes entirely, so a project mixing levels of care should also consult those pages. A California study should test private-pay demand among seniors in the submarket, the licensed bed count the building can hold, staffing and wage costs, state licensing timelines and the stabilised census. Debt service coverage ought to be shown through a lease-up that can take well beyond a year, with the licence and inspection dates that gate the first resident, and the appraiser will want to see how revenue per bed holds under a slower fill.