Skilled Nursing Feasibility Study in Minnesota

Second in the nation, and well above its weight

Among 48 states Minnesota stands second, 2 of 48, for skilled nursing loans, and the location quotient of 2.62x signals that nursing care is a far heavier presence in Minnesota lending than across the country. Yet inside Minnesota skilled nursing places only 23 of 39 among asset classes, which tells us that the state is small in total SBA volume while specialising in care facilities. From FY2017 to FY2026 there were 53 loans and $57.8 million. The median loan is $720,000, about 1.07x the nationwide level, with typical loans between $340,000 and $1.2 million. These are real facility loans, not minor working capital lines.

Programs and the large lenders

SBA 7(a) accounts for 36 loans and SBA 504 for 17, and franchising barely registers at 3.8% of loans. Midwest Business Finance Corporation leads the 504 list with 8 loans and $13.3 million, and Amplio Economic Development Corporation follows with 5 and $2.9 million. In 7(a), Byline Bank holds 8 loans worth $12.6 million, a large average ticket. Hennepin County has 15 loans and Ramsey 9, so the Twin Cities carry the largest share, with Dakota and Rice at 4 each and Waseca at 3. Lenders in this field tend to be specialists who understand Medicare and Medicaid cash cycles.

What the data does not separate

Hospice inpatient units and nursing-supported assisted living cannot be split from skilled nursing, since the code for nursing facilities also holds those uses. A reader should therefore treat the count as nursing-type care in general, not a pure skilled-nursing roll. Cancellation is 10.4% at the floor for earlier approvals up to FY2024, and counting undisbursed loans leaves it at 10.4%. No charge-off rate is shown, since the funded FY2017 to FY2021 set holds fewer than 30 loans; that gap is not evidence of no loss.

The skilled nursing study agenda

Nursing facility feasibility turns on three things: reimbursement, staffing and licensing. A Minnesota study should test the state's rate-setting for Medicaid days, the mix of Medicare short-stay patients, and whether the area has enough wage-competitive nurses and aides to staff to the census proposed. Certificate or moratorium rules in the state may limit bed additions, and the study should say how they apply to the project. Debt service coverage must hold at a conservative occupancy. The appraisal will treat licensed beds as part of an operating business. This page offers the lender and sponsor one shared view of what similar loans looked like.