SBA 504 Loans for Nursing Homes
Nursing homes fall into the wider retirement communities segment of the economy, which continues to see significant growth and development. It is expected to generate $69 billion in 2018 alone, and there are currently almost 46,000 retirement communities within the United States. This makes nursing
SBA 504 Loans Offer Funding Solutions for Nursing Homes
Nursing homes fall into the wider retirement communities segment of the economy, which continues to see significant growth and development. It is expected to generate $69 billion in 2018 alone, and there are currently almost 46,000 retirement communities within the United States. This makes nursing homes excellent candidates for the SBA 504 loan program.
Nursing Home Operators Can Utilize SBA 504 Loans for a Variety of Uses
An SBA 504 loan can offer nursing home operators the means to purchase a variety of important fixed assets. These include:
Real estate, buildings, and new construction financing for new facilities or additions to current ones,
New equipment for use in caring for residents, such as:
Alarms
Cholesterol monitors
Beds, lifts, and other types of furniture
Other types of long-term equipment
What are the eligibility requirements for SBA 504 loans for nursing homes?
In order to be eligible for an SBA 504 loan for nursing homes, the business must meet the following requirements:
- The business must be a for-profit, small business as defined by the SBA.
- The business must be located in the United States.
- 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 past two years.
- The business must use the loan proceeds for a qualifying purpose, such as the purchase of real estate, buildings, or equipment.
- The business must be able to demonstrate the ability to repay the loan.
For more information on SBA 504 loans for nursing homes, please visit https://sba504.loans/sba-504-blog/sba-504-loans-for-nursing-homes.
What are the benefits of SBA 504 loans for nursing homes?
SBA 504 loans offer nursing home operators the means to purchase a variety of important fixed assets, such as real estate, buildings, and new construction financing for new facilities or additions to current ones, as well as new equipment for use in caring for residents. In addition, businesses that reduce energy their energy use by 10% can take out up to $5.5 million per SBA 504 loan, with a lifetime limit of up to $16.5 million in 504 loans.
For more information, please visit SBA 504 Loans for Nursing Homes.
What are the terms and conditions of SBA 504 loans for nursing homes?
The SBA 504 loan program offers long-term, fixed-rate financing for up to $5 million for the purchase of fixed assets, such as real estate, buildings, and new construction for new facilities or additions to current ones, as well as new equipment for use in caring for residents. The loan is typically structured with a 50% loan-to-value (LTV) ratio, with the borrower providing 10% equity and the remaining 40% being provided by a Certified Development Company (CDC). The loan term is typically 20 years for real estate and 10 years for equipment.
The interest rate for the loan is based on the market rate for 5- and 10-year U.S. Treasury issues, plus a spread of 2.75% to 3.75%. The interest rate is fixed for the life of the loan, and the loan is fully amortized over the term of the loan. The loan also includes a one-time closing fee of approximately 3% of the loan amount.
In addition, the borrower must meet certain eligibility requirements, including being a for-profit business, having a net worth of less than $15 million, and having an average net income of less than $5 million over the past two years. The borrower must also demonstrate the ability to repay the loan.
How can I apply for an SBA 504 loan for a nursing home?
You can apply for an SBA 504 loan for a nursing home by filling out the form on this page. The loan can be used to purchase real estate, buildings, and new construction financing for new facilities or additions to current ones, as well as new equipment for use in caring for residents. It can also be used to help your facility go green and reduce your impact on the environment. In general, 504 loans cannot be used to finance short-term equipment, such as medical supplies like medication, bandages, or gait belts, and cannot be used to fund working capital for the daily expenses of the business. Existing loans can also be rolled into an SBA 504 loan so long as they meet the funding use requirements.
What documents are required to apply for an SBA 504 loan for a nursing home?
To apply for an SBA 504 loan for a nursing home, you will need to provide the following documents:
- Business plan
- Personal financial statement
- Business financial statement
- Business tax returns
- Personal tax returns
- Business licenses
- Lease agreements
- Appraisal report
- Environmental report
- Survey
- Title report
You can find more information about the SBA 504 loan program here.
In general, 504 loans cannot be used to finance short-term equipment, such as medical supplies like medication, bandages, or gait belts, and cannot be used to fund working capital for the daily expenses of the business. Existing loans can also be rolled into an SBA 504 loan so long as they meet the funding use requirements.
Nursing Homes Can Benefit From The 504 Green Loan Program
SBA 504 loans can also be used to help your facility go green and reduce your impact on the environment. In fact, businesses that reduce energy their energy use by 10% can take out up to $5.5 million per SBA 504 loan. In addition, they can take out multiple SBA 504 loans, as they are allowed $5.5 million per project, with a lifetime limit of up to $16.5 million in 504 loans.
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