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Financing A Residential Assisted Living Home: Loans

Have you tossed around the idea of purchasing an assisted living home? Everything you need to know about financing the deal can be learned at the Residential Assisted Living Academy.

This blog will provide you a glimpse into the important aspects involved with financing your business.

There is a method to the madness.

If you want to invest in senior living, securing financing is usually a critical step. Here’s how you can achieve your dream of owning a residential assisted living home.


Americans are living longer. Not only are Americans living longer, but they are also living healthier lives.

Thanks to early diagnosis, intervention, prevention, and modern medicine, the life expectancy for Americans has increased.

The percentage of Americans who have made it to 90 has nearly doubled since 1980.

By 2050, Americans reaching 90 years of age will double again, according to estimates. Senior living is more than an option, it’s a necessity. Senior housing is in high demand because baby boomers require housing that is appropriate for them.

Living at home alone or with working adult children is not the best option for vibrant seniors.

However, living amongst peers with similar experiences and common interests makes for an active lifestyle.

Investors should have a working knowledge of funding avenues for assisted living homes to position themselves at the forefront of the senior tsunami.


The SBA 7(a) loan is a viable solution to answer the question of financing. It is considered one of the most popular loan types for assisted living homes.
This blog article will explore the following 5 steps about SBA 7(a) loans:

  1. How do these loans work?
  2. How can an investor qualify for this loan?
  3. Where to apply for these loans and what lenders are approved to dispense them?
  4. Top lenders of this loan type.
  5. Necessary documentation for these loans.


The Small Business Association’s 7(a) loan is perhaps the most popular loan product offered by the Small Business Administration.

Other Options for SBA Loans

  • Real Estate (25-year term)
  • Working Capital (10-year period)
  • Equipment (10-year period)
  • Debt Refinance
  • Change of Ownership

Interest rates generally range from 7.75% to 10.25%. This loan is not a “one-size-fits-all” loan product, and the SBA does not govern it as if it is.

What does this mean to you as an investor? You may secure additional financing elsewhere.

While the SBA has been generous, some assisted living homes will cost more to acquire than the maximum lent through the SBA.

Therefore, make sure to look for and secure other options if needed.

What Do I Need to Qualify for an SBA 7(a)? Qualifying for the SBA 7(a) loan can be a lengthy process.

Qualifying Factors Concerning SBA Loans

  • SBA loans only benefit for-profit companies.
  • The SBA website lists information for public consumption.
  • The SBA wants to see your private money as a source of support for the business.
  • Have a net revenue of less than $7.5 million.
  • Have less than 500 employees.
  • Have a net income of less than $5 million.
  • Possess a net worth of less than $15 million.
  • Have obtained other forms of financing first (such as personal assets).
  • Do business within the United States of America.
  • Have certifiable proof of no other delinquencies on any other loans.

The SB wants to know that you are owning and operating a small enterprise in the United States and make sure you can repay the loan.


You do not need to visit the Small Business Administration, because various lending institutions dispense loans.

Bank loans have an SBA guarantor.

In this way, the SBA ensures that, if you are delinquent, a certain amount of the loan is covered. The standard 7(a) is guaranteed up to 85% on loans up to $150k.

Loans that are greater than $150k are guaranteed up to $75%. Therefore, understand that the SBA will not take applications for a 7(a) but are rather guarantors for loans dispensed by multiple institutions for assisted living homes.

The Top 10 Lenders for The SBA 7(A) For Assisted Living Home Financing

Many banking institutions offer loans that are SBA 7(a) certifiable. However, some do better than others with the process and approvals.

Below are the top 10 lenders, the SBA 7(a).

These lenders rank based on the number of loans dispensed and the value of those loans.

The following is a list of the top 10:

  1. Live Oak Bank distributed 692 loans valued at $1 billion.
  2. Wells Fargo Bank dispensed 2,316 loans with a value of $619 million.
  3. Huntington National Bank dispensed 2,731 loans valued at $500 million.
  4. Newtek Small Business Finance dispensed 679 loans valued at $467 million.
  5. Byline Bank dispensed 342 loans valued at $407 million.
  6. Celtic Bank Corporation dispensed 584 loans valued at $368 million.
  7. JPMorgan Chase Bank dispensed 1,428 loans valued at $361 million.
  8. First Home Bank dispensed 1,185 loans valued at $304 million.
  9. US Bank dispensed 1,976 loans valued at $288 million.
  10. KeyBank dispensed 389 loans valued at $217 million.

The above-listed institutions are phenomenal when it comes to the SBA 7(a). If one lender is unimpressed with your resume or business plan, do not fear.

The list is plenteous, and you are bound to find the right lender for your project. There is a method to securing an SBA 7(a) loan:

  • First, begin with banks familiar with the program and are currently writing the 7(a) products.
  • Second, work with the larger banks before approaching the smaller ones
  • Third, examine the lending institution’s Approved Loan Count to Loan Volume Ratio.

By examining these criteria, you will gain valuable information that will help predict an approval or denial.


Information is more valuable than gold in many instances, because we live in the information age.

So, what information will an SBA7(a) lender require from you?

Here is a list that is general, but quite applicable across multiple lenders:

  • Your credit scores
  • Business plan
  • Collateral
  • Profitability


For many first-time investors or business owners, documentation may be overwhelming. Do not disregard your dream of owning an assisted living home because of the preliminary work.

You will not undertake this alone.

The loan officers at many banks will assist you along the way. Documentation is essential because it tells a complete story.

In general, institutions will require three years of business and personal tax returns and current financial statements.

Financial statements provide a comprehensive picture for lenders to process SBA 7(a) appropriately.

The Residential Assisted Living Academy is the leading organization that educates, trains, partners, and supports owners of assisted living homes from start to finish.

Remember, not all assisted living homes qualify. A home must be licensed appropriately.


Before obtaining any loan, you will want to network with successful people in this industry.

Practicality is the best strategy. Use the resources at the Residential Assisted Living Academy to learn everything from A-Z to start owning and operating your assisted living business.

During the 3-day course, you will be able to ask questions and network with other professionals in the industry.

Experts at the RAL Academy are more than glad to help. The SBA 7(a) is only one loan type; there are others, and our professional staff can channel you in the right direction.

The Baby Boomers set off a population boom in this country after World War II. Now, they are redefining the infrastructure of senior housing nationwide.

As a result, small residential assisted living homes are in high demand across the country.

Gene Guarino and industry experts at the Residential Assisted Living Academy will help you get your project off of the ground.

Contact and receive the education, training, and knowledge needed to operate a successful assisted living home.

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