SBA 7(a) Assisted Living Feasibility Study in Texas

Fifth in the nation, eighteenth in Texas

Assisted living without on-site nursing is a mid-table class in Texas, ranking 18 of 39 among the state's financed classes, yet Texas is fifth-ranked on loan count for the class under 7(a). The state logged 148 such approvals across the decade, totalling $233.5 million. The median of $1.1 million runs to 1.48x the nationwide 7(a) figure for care homes, which is what sets this cell apart: Texas operators borrow on a scale well above the country's norm. The middle half of loans runs from $421,350 to $2.5 million, a wide band that holds both converted houses and purpose-built campuses. Franchising is nearly absent at 6.1% of loans.

One lender dominates the book

Live Oak Banking Company stands alone at the top with 30 loans and $69.5 million, far ahead of Third Coast Bank and Bank Five Nine with 9 loans apiece, and of Newtek Small Business Finance, LLC, also with 9. Wallis Bank has 8 loans but $18.1 million, a high dollar average that suggests larger projects. Those figures record who holds or held each loan in SBA's files and do not describe any lender's requirements. The counties follow the big metros: Harris has 27 loans, Fort Bend and Montgomery 15 each, Collin 13, Tarrant 12 and Dallas 11.

What the cohort floors say

Cancellations hit a floor of 12.9% for approvals made in FY2017 through FY2024; treat undisbursed loans as cancelled and the ceiling becomes 14.0%. In the cohort of 50 loans that disbursed between FY2017 and FY2021, the charged-off share so far is 2.0%, yet the five-year window shows 0.00%. Neither reading is final; a clean five-year window leaves room for losses later in a loan's life.

Study requirements, and the coding limit

Anyone studying a Texas care home must show that the market can fill the beds at the rates the pro forma assumes. The work means counting older residents nearby with private means, naming the competing homes by licensed capacity, and testing lease-up honestly, since a home loses money until census builds. Cost per bed should be reconciled with a loan size that usually runs above the national figure. Staffing is the largest operating line, so wage assumptions deserve a downside case, and debt service coverage must hold at a stabilised occupancy below the target. The appraisal values the going concern, so the revenue line must be something an appraiser can defend. A word on classification: the code used here covers only homes lacking on-site nursing, there is no memory care category at all, and a home offering nursing lands elsewhere, under the skilled nursing and continuing care groups, which a mixed-acuity plan should also consult.