SBA 7(a) Skilled Nursing Feasibility Study in Washington

Second in the nation, but a small share of Washington lending

Skilled nursing is a case where the state rank and the class rank pull apart. Washington is 2 among states for SBA 7(a) skilled nursing loans, yet the class occupies only 20 of 39 places among Washington's own asset classes. SBA approved 40 such loans between FY2017 and FY2026, worth $24.9 million in gross dollars. The loans are not large: the $375,000 median is 0.75x the national figure, and the typical range begins at just $50,000 and reaches $904,250. A skilled nursing facility is normally a multi-million dollar enterprise, so these tickets point to working capital, equipment, partner buy-ins or a small purchase, not to a full building.

Columbia Bank and the Puget Sound counties

Columbia Bank is the one lender listed, with 16 loans and $5.5 million. That is a statement about who currently holds the loans, as SBA reports it, and a borrower should not conclude anything about other lenders from it. King County has 10 loans, Snohomish 7, and Clark and Pierce 6 each, while Benton and Lewis have 3 each and Cowlitz, Franklin, Thurston and Whatcom 1 each. Franchise labels do not appear. Yearly counts swing from 8 loans in FY2018 to a single $1.3 million loan in FY2020, and FY2022 shows 2 loans totalling only $50,000.

Cancellations, losses and what the code mixes in

Washington approvals through FY2024 were cancelled at least 9.7% of the time, and the ceiling with undisbursed loans included stays at 9.7%. Washington's loss rate is left off since the early funded loans number fewer than a rate requires. On coding, SBA files inpatient hospice and nursing-supported assisted living under the skilled nursing industry code, so the class is wider than its name. A Washington project that is mainly a hospice or a nursing-supported assisted living residence is counted here, and the statistics describe a blend.

Questions the study must answer

Skilled nursing economics rest on census and payer mix, so the study has to show expected occupancy, the proportion of residents paid by Medicaid, Medicare and private funds, and how reimbursement rates would carry the payment. State licensing and certificate rules for beds shape what can be built, and the study should say what approvals are needed and how long they take. Staffing is the heaviest cost and the hardest to fill, so wages, agency use and turnover must be priced. Because these loans are smaller than a building purchase, the study should state what the money buys. A lender will want a downside case in which census lags and reimbursement is slower than planned.