SBA 7(a) Skilled Nursing Feasibility Study in Minnesota

Larger loans than elsewhere, led by one lender

Minnesota's skilled nursing loans under SBA 7(a) are larger than the class elsewhere. The median is $625,000, which is 1.25x the national median, and the middle half spans $269,500 to $962,500. SBA approved 36 loans from FY2017 to FY2026, worth $35.4 million, which makes Minnesota 3 among states, while the class holds 22 of 39 places inside Minnesota. Byline Bank is the holder of 8 loans totalling $12.6 million, a mean far above the median, which hints at a few large transactions at the top of the list.

Hennepin and Ramsey, and a thin outstate

Hennepin County has 12 loans and Ramsey 8, with Dakota at 3, Anoka, Rice and Waseca at 2, and single loans in Chisago, Clay, Martin and Otter Tail. The Twin Cities carry the class, and a rural Minnesota nursing home would have few precedents. Franchise affiliation is 5.6% of loans. SBA reports the holder of record today, which is no guide to any lender's appetite. Annual counts are uneven: 9 loans and $9.3 million in FY2023, only 1 loan each in FY2024 and FY2026, at $891,000 and $585,000.

Cancellations, losses and the coding blend

For Minnesota approvals through FY2024 the cancellation floor is 9.4%, with an identical ceiling. Too few of the earliest loans funded to publish a charge-off rate, so it is absent and not zero. Hospice stays and nursing-supported assisted living are coded with skilled nursing, which makes the class broader than its label.

What a Minnesota nursing study has to prove

The core question is census. A study should show current bed supply and occupancy in the market, expected admissions from hospitals and communities, and how long a new or acquired facility would take to reach stable occupancy. Payer mix and reimbursement rates determine whether revenue can carry staffing, which is the largest expense in the class. Staff recruitment in a tight labour market, wage levels and agency use deserve their own section. State licensing and survey history, if an existing facility is bought, are part of the due diligence. The payment must be covered under a lower-census case, and an appraiser should value the going concern as well as the real estate, since the two differ for nursing homes. Minnesota's winters and rural distances also affect admissions, visits from family and the staff a facility can hire, and the study should say how the operator will manage them.