Updated November 13, 2026
Quick answer
As of November 2026, assisted living and memory care facilities qualify for SBA loans if they're licensed and provide healthcare services such as medication help or wellness checks. Unlicensed residential homes don't. An established operator buying its own building may find 100% financing; buying a running facility needs at least 10% down. Axiant Partners, a broker in Boca Raton, finds these lenders.
The Eligibility Test
SOP 50 10 8.1 makes nursing homes, assisted living facilities and state-licensed equivalents eligible when they provide healthcare or medical services. It lists wellness checks, monitoring or helping with medication, monitoring blood sugar and having medical staff on site, even part time. Residential facilities that aren't licensed this way and don't provide those services are ineligible, as are apartment buildings. The lender reads your license to decide.
Memory care usually qualifies under the same test, since it's licensed care with medication oversight. Independent living that only rents units and serves meals usually doesn't.
Two Very Different Deals
| Operator buys its building | Buyer acquires a running facility | |
|---|---|---|
| SBA treatment | Real estate purchase, no ownership change | Change of ownership |
| Minimum equity | No fixed SBA minimum; some lenders go to 100% | 10% of total project cost |
| Cash flow test | Lender's analysis of history | 1.25x debt service coverage |
| Maximum term | 25 years | 25 years if 85%+ of project is real estate |
| Valuation | Real estate appraisal | Going concern appraisal by a specialist |
The first column is the 100% SBA financing case. In the second, the SOP treats an assisted living building as a special purpose property. When the building can't be separated from the business and is 85% or more of the cost, the whole loan can run 25 years. The appraiser must have done at least four going concern appraisals of similar properties in the last 36 months.
Worked Examples
Illustrative numbers, not a quote or an offer; rates and fees change, and every loan is subject to approval. Fees are from the FY2027 7(a) schedule, financed.
| Operator buys its building | Buyer acquires a facility | |
|---|---|---|
| Price | $3,200,000 | $4,000,000 |
| Reports and packaging (est.) | $26,500 | $32,500 |
| Cash down | $0 | About $403,250 (10%) |
| SBA guaranty fee (computed) | About $90,799 | About $102,454 |
| SBA 7(a) loan | About $3,317,299 | About $3,731,704 |
| Payment, 7.75% over 25 yrs | About $25,057 | About $28,187 |
On the acquisition, annual payments of about $338,240 mean the facility needs about $422,800 of cash flow for debt service to clear 1.25x, from last year's or a two-year average of actual results.
Payer Mix and What Lenders Look At
This is lender practice, not SBA rule. Most lenders are most comfortable with facilities that are mostly private pay. Heavy reliance on Medicaid waiver programs usually means tighter margins and state rate risk, so expect more questions and sometimes more cash down. Lenders also look at:
- Occupancy history by month for two or three years.
- State survey results and any citations or enforcement.
- Licensed beds versus occupied beds, and whether the license transfers to a buyer.
- Staffing costs and the administrator's experience.
- Management agreements. The lender must review them; an agreement that hands control to an outside operator can make the business an ineligible passive company.
SBA 504 as an Alternative
A 504 offers a fixed rate on the SBA portion. Because assisted living is on the SOP's limited or special purpose list, the borrower contributes at least 15%, or 20% if the business is also new. On a $4,000,000 project at 15%, that's $600,000 down, a $2,000,000 bank loan and a $1,400,000 debenture. See 504 loan fees for the costs. For other healthcare real estate, see the healthcare practice financing guide.
Talk to an SBA specialist: (561) 268-0465, or get matched with lenders who offer this structure.
Frequently Asked Questions
Are assisted living facilities eligible for SBA loans?
Yes, if they are licensed as assisted living or nursing homes, or a state equivalent, and provide healthcare services such as medication help or wellness checks.
Can an unlicensed group home get an SBA loan?
No. Residential facilities that aren't licensed as nursing homes or assisted living and don't provide healthcare services are ineligible.
How much down do I need to buy an assisted living facility?
Buying a running facility is a change of ownership, so the SBA minimum is 10% of the total project cost. An operator buying its own building may find lenders that go to 100%.
What term can I get?
Up to 25 years on real estate. On an acquisition, the whole loan can be 25 years if the property is 85% or more of the project and can't be separated from the business.
Do lenders care about Medicaid residents?
Many lenders prefer mostly private-pay facilities and look harder at heavy Medicaid reliance. That's lender practice, not an SBA rule, and lenders differ.
How much is down on an SBA 504 for assisted living?
At least 15%, because it's a special purpose property, or 20% for a new business.
Sources & Further Reading
- SBA SOP 50 10 8.1 (effective October 1, 2026) — The SBA's rules for 7(a) and 504 loans, including equity injection, Appendix 15 on changes of ownership, and eligibility.
- NAGGL: FY 2027 7(a) and 504 fee notices — Summary of SBA Information Notice 5000-881797, the 7(a) upfront guaranty fees effective October 1, 2026.
- SBA 7(a) Loans — Program overview and the $5 million maximum loan amount.
- SBA 504 Loans — Fixed-rate financing for real estate and long-term equipment through Certified Development Companies.
Figures above describe ranges commonly seen across lenders and reflect published guidance as of the date on this page. Confirm current terms with the cited source or your lender before acting.