Skilled Nursing Feasibility Study in California

First among states for skilled nursing

California has more SBA skilled nursing approvals than any other state, ranking 1 of 48, with 147 loans worth $178.0 million in FY2017 to FY2026. The location quotient of 1.61x gives the class more weight in California's lending than in the nation's, although within the state's own book skilled nursing ranks only 22 of 39 by count. A median approval of $745,000 runs 1.11x the class median nationwide, and when each metric is set against California's all-class figures and against skilled nursing nationally, the gaps all fall inside our margin on one side or the other. Scale is the story: California is where SBA lenders do the most skilled nursing business, and the outcome record so far is clean.

Development companies and Los Angeles

SBA 504 carried 35 of the loans and 7(a) 112. On the 504 side, 19 loans worth $36.2 million belong to The Mortgage Capital Development Corporation, and 8 to Business Finance Capital. Among 7(a) holders, Celtic Bank Corporation has 15 loans worth $20.0 million, Live Oak Banking Company, Columbia Bank and BayFirst National Bank 7 each, and Open Bank 6 worth $11.4 million. Half the California approvals sit between $300,850 and $1.5 million, modest sums for a licensed nursing facility, which may reflect the hospices and assisted living with nursing that share this code. Franchise share is 0.00%. Los Angeles County leads with 37 approvals, San Diego has 14 and San Bernardino 12. FY2026 was the peak year, with 26 loans worth $50.3 million.

No charge-offs so far

California nursing approvals dated FY2017 to FY2024 show an 11.7% cancellation floor and a 12.6% ceiling, below the class nationally. Among the 55 California nursing loans funded across FY2017 to FY2021, charge-offs come to 0.00% over the life of the loans so far and 0.00% over the first five years; each is a floor on loans still open, and the large FY2026 vintage has no record yet.

A clean record does not make a California nursing project easy to underwrite. A feasibility study has to show demand in the facility's service area from older residents needing skilled care, the referral flow from hospitals, and the beds already licensed and planned nearby. Revenue depends on payer mix, so the study must model Medicare, Medi-Cal and private pay separately at the rates the facility can actually collect, and the staffing plan must meet required nurse ratios at market wages, often the largest cost. Debt service coverage should be tested at realistic occupancy and with payer mix under pressure. Licensing and any change of ownership approvals should be mapped before approval. The appraisal of a nursing facility is a going-concern valuation tied to its licence and income, so the study's forecast must be one the appraiser can adopt.

Other operators share the skilled nursing code: inpatient hospices and assisted living homes that provide nursing cannot be separated out, so both sit inside these California figures.