Top banks for nursing home SBA loans

Last annual update: Aug 28, 2022

The nursing home industry continues to grow. With 10,000 Baby Boomers turning 65 every day, America’s population continues to age, and nursing homes continue to fill up their beds.

The high cost of home care has also helped the nursing home industry. The price differential between the two is not nearly as substantial as it used to be, and many families are opting for nursing home care because of the physical and emotional stress of being a family caregiver.

An SBA loan can help get your nursing home off the ground. It can be used to purchase land, buy equipment and supplies, refinance debt, or even purchase a competitor’s nursing home.

 

Benefits of owning a nursing home

The biggest benefit of owning a nursing home is the potential for very high revenue. The average annual cost of a semi-private room in a nursing home is $98,000, and over $105,000 for a private room. Multiplied by the number of rooms in an average nursing home, you can see how substantial a nursing home’s annual revenue can be.

The nursing home industry is also very gratifying. Nursing home personnel enjoy knowing the difference they’re making in seniors’ lives and go home each day knowing that nursing homes provide a very valuable service as people age.

 

How to obtain financing to open, expand, or buy a nursing home

If you’re looking for nursing home financing, consider applying for an SBA loan. The various loan programs offered by the Small Business Administration can help provide the funding you need to set up your business.

The SBA is a government agency that doesn’t lend you the money directly. Instead, it guarantees a significant portion of your loan. That lowers the risk profile for SBA’s lending partners, which include conventional banks and financial institutions, so they’re more willing to approve loan requests.

You also must put significantly less cash or equity down to qualify with an SBA loan. And, with an SBA loan, no covenants or collateral is required.

The most common SBA nursing home loans include the SBA 7(a) and Express loans.

 

SBA 7(a) loan for starting or buying a nursing home

The 7(a) is the preferred SBA loan for nursing homes. You can use the funds made available through this program to purchase property, expand your office, open a new office, or even purchase a competitor’s company.

If you own an existing nursing home and want to buy out a partner, you can utilize the funds from an SBA 7(a) loan for that purpose.

The maximum SBA loan for a nursing home is $5 million. These term loans can be as long as 25 years for purchasing property and are generally repaid with monthly payments that include interest.

The payment stays the same for fixed-rate loans since the interest rate is locked in. However, for variable rate loans, it’s up to the lender to request a different payment amount if the interest rate changes.

 

SBA Express Loans for nursing homes

SBA Express Loans are a part of the agency’s 7(a) loan program. Up to $500,000 can be borrowed under an Express loan. The approval times are typically much faster for these loans.

Express loans over $25,000 have a collateral requirement. The SBA usually responds to Express loan applications within 36 hours.

The lenders ultimately make all eligibility and credit decisions. The market prime rate plus 4.5-6% interest is applied with repayment terms of up to 10 years.

 

How to apply for an SBA nursing home loan

Access our network of SBA lenders that includes leading nationwide banks, credit unions, and other financial institutions. Our lending partners are experienced in handling applications for nursing homes, so they will diligently pursue your opportunity.

There are countless SBA approved lenders that are ready to offer you a nursing home SBA loan. These are just some of the top lenders:

 

  Find me a nursing home lender!  

RankBankCityState# of LoansAvg Loan $Avg Interest
1Umpqua BankRoseburgOR56$1,002,6055.0%
2Celtic BankSalt Lake CityUT47$1,756,0895.7%
3Live OakWilmingtonNC42$1,866,1795.3%
4Pinnacle BankMorgan HillCA32$1,282,0314.9%
5Harvest Small Business FinanceLaguna HillsCA23$1,422,0575.5%
6America First FCURiverdaleUT16$1,340,3815.0%
7Bank Five NineOconomowocWI13$1,526,9545.0%
8Mountain America FCUSandyUT13$1,186,7695.8%
9Wells FargoSioux FallsSD12$925,6676.6%
10Byline BankChicagoIL10$1,803,3506.0%
11North State BankRaleighNC10$1,249,7206.1%
12Readycap Lending, LLCBerkeley HeightsNJ10$1,857,4305.6%

  Find me a nursing home lender!