Can Assisted Living Facilities Use SBA 504 Loans?
Yes, assisted living facilities can make use of SBA 504 loans . In fact, these facilities are a prime example of an almost perfect fit. The demand for assisted living, memory care, and other age-related care facilities is growing exponentially as Baby Boomers age out. In fact, total revenue for the
Using SBA 504 Loans for Assisted Living Facilities
Yes, assisted living facilities can make use of SBA 504 loans. In fact, these facilities are a prime example of an almost perfect fit. The demand for assisted living, memory care, and other age-related care facilities is growing exponentially as Baby Boomers age out. In fact, total revenue for the sector is expected to reach $69 billion in 2018, and the segment has grown 3.6% since 2013.
So, whether you are planning a new facility, or you want to expand your current one, an SBA 504 loan can give you up to $5 million in funds for use to purchase real estate, pay for construction, or purchase equipment needed to care for residents in some way.
504 Loans Are Also Available to Other Types of Senior Care Businesses
In addition to assisted living facilities, SBA 504 loans are also available to a variety of other businesses in involved in caring for seniors, including:
Nursing homes and skilled nursing centers
Board and care facilities and residential group homes
Continuum-of-care facilities (in some circumstances)
Rehab and intermediate care facilities geared toward senior citizens
Adult daycare facilities for seniors
What are the eligibility requirements for SBA 504 loans for assisted living facilities?
Assisted living facilities are eligible for SBA 504 loans if they meet the following requirements:
- The business must be a for-profit, small business as defined by the SBA.
- The business must occupy at least 51% of the project being financed.
- The business must create or retain at least one job for every $65,000 of SBA 504 loan funds.
- The business must have a tangible net worth of less than $15 million and an average net income of less than $5 million after taxes for the preceding two years.
For more information on eligibility requirements, please visit https://sba504.loans/sba-504-blog/what-are-the-eligibility-requirements-for-sba-504-loans/.
What are the benefits of using an SBA 504 loan for assisted living facilities?
Assisted living facilities can benefit from using an SBA 504 loan in a variety of ways. These loans can provide up to $5 million in funds for use to purchase real estate, pay for construction, or purchase equipment needed to care for residents. This can help businesses in the senior care sector to expand their current facilities or build new ones. Additionally, SBA 504 loans are also available to a variety of other businesses in involved in caring for seniors, including nursing homes and skilled nursing centers, board and care facilities and residential group homes, continuum-of-care facilities, rehab and intermediate care facilities, and adult daycare facilities for seniors.
For more information on SBA 504 loans, please visit https://sba504.loans.
What are the steps involved in applying for an SBA 504 loan for assisted living facilities?
The steps involved in applying for an SBA 504 loan for assisted living facilities are as follows:
- Find a Certified Development Company (CDC) to work with. The CDC is the lender and will work with you to complete the loan application.
- Gather the necessary documents. This includes financial statements, tax returns, and other documents that demonstrate your ability to repay the loan.
- Submit the loan application. The CDC will review the application and determine if you are eligible for the loan.
- Receive approval. If approved, the CDC will provide you with the loan documents to sign.
- Sign the loan documents. Once the documents are signed, the loan will be funded.
For more information, please visit https://sba504.loans/sba-504-blog/can-assisted-living-facilities-use-504-loans.
What are the maximum loan amounts for SBA 504 loans for assisted living facilities?
Assisted living facilities can make use of SBA 504 loans for up to $5 million in funds for use to purchase real estate, pay for construction, or purchase equipment needed to care for residents in some way. Additionally, the SBA offers access to additional funding (up to $16.5 million in lifetime funds) for those assisted living facilities interested in reducing their carbon footprint and becoming more environmentally friendly through the organization’s “go green” program.
For more information, please visit https://sba504.loans and https://sba504.loans/sba-504-blog/what-is-the-sba-504-loan.
What are the repayment terms for SBA 504 loans for assisted living facilities?
The repayment terms for SBA 504 loans for assisted living facilities are long-term, fixed-rate loans with a 10% down payment. The SBA 504 program provides up to $5 million in funds for use to purchase real estate, pay for construction, or purchase equipment needed to care for residents in some way. Additionally, the SBA also offers additional funding for those who wish to become more environmentally friendly through the SBA 504 Green Program. To become eligible, borrowers must cut their facility’s energy use by 10% by implementing green options such as wind, solar or geothermal power.
Sources:
In general, independent living facilities are not eligible for SBA 504 loans, as these are considered more in the vein of passive real estate than an actively managed business. This is because they generally consist of age-restricted apartment communities with no common eating areas or healthcare services offered. Continuum-of-care facilities will likely need to be assessed on a case-by-case basis, as they typically consist of a certain amount of independent living facilities, along with a number of assisted living and skilled nursing units.
More Funds Are Available to Borrowers Utilizing the SBA 504 Green Program
It should be noted that the SBA offers access to additional funding (up to $16.5 million in lifetime funds) for those assisted living facilities interested in reducing their carbon footprint and becoming more environmentally friendly through the organization’s “go green” program. To be eligible for tis program, a borrower needs to cut their building’s energy use by 10%, acquire a new building that uses 10% less energy, or replace 10% of their building’s current energy usage with alternative energy, such as wind, solar, or geothermal power.
We’re here to help you get the commercial financing you need. Simply fill out the form below for a risk-free consultation and a free SBA loan quote!