SBA 504 Loans for Assisted Living Facilities

Understanding how SBA 504 financing can help grow your senior care business

Assisted living facilities are well-suited for SBA 504 loan financing. These facilities represent an ideal fit for this type of financing, especially given the growing demand for assisted living, memory care, and age-related care facilities as the Baby Boomer generation ages. The senior care sector has experienced significant growth, with total revenue expected to reach substantial figures in recent years.

SBA 504 loans can provide up to $5 million in financing for purchasing real estate, construction projects, or equipment needed for resident care. This makes them an excellent option for expanding existing facilities or building new ones.

Key Benefits of SBA 504 Loans

Up to $5 Million

Access substantial financing for real estate purchases, construction, or equipment acquisition.

Long-Term Fixed Rates

Benefit from long-term, fixed-rate financing with competitive terms and low down payments.

Growth Opportunities

Expand your current facility or build new locations to meet growing market demand.

Eligible Senior Care Facility Types

In addition to assisted living facilities, SBA 504 loans are available to various senior care businesses:

Nursing Homes & Skilled Nursing Centers

Facilities providing comprehensive medical care and support

Board and Care Facilities

Residential group homes for seniors requiring assistance

Rehab & Intermediate Care Facilities

Facilities focused on rehabilitation and recovery for seniors

Adult Daycare for Seniors

Daytime care and activities for senior citizens

Note: Independent living facilities are generally not eligible for SBA 504 loans, as they are considered passive real estate investments rather than actively managed businesses. Continuum-of-care facilities may be assessed on a case-by-case basis.

Eligibility Requirements

To qualify for an SBA 504 loan for your assisted living facility, you must meet these requirements:

  • Must be a for-profit small business as defined by the SBA
  • Business must occupy at least 51% of the project being financed
  • Must create or retain at least one job for every $65,000 of SBA 504 loan funds
  • Tangible net worth must be less than $15 million
  • Average net income must be less than $5 million after taxes for the preceding two years
SBA 504 Green Program

The SBA offers additional funding opportunities (up to $16.5 million in lifetime funds) for assisted living facilities interested in reducing their environmental impact through the "go green" program.

To qualify for the Green Program, you must:

  • •Reduce your building's energy use by 10%, OR
  • •Acquire a new building that uses 10% less energy, OR
  • •Replace 10% of current energy usage with alternative sources (solar, wind, geothermal)
Application Process

The SBA 504 loan application process involves these key steps:

  1. 1

    Find a Certified Development Company (CDC)

    The CDC acts as the lender and guides you through the application process

  2. 2

    Gather Required Documents

    Financial statements, tax returns, and documentation demonstrating repayment ability

  3. 3

    Submit Application

    The CDC reviews your application and determines eligibility

  4. 4

    Receive Approval & Sign Documents

    Once approved, review and sign loan documents to receive funding

Ready to Explore Your Financing Options?

Use our SBA Loan Prequalification Calculator to estimate your purchasing power