Funding Options That Actually Work for Assisted Living

assisted living business assisted living funding financing assisted living hard money loans assisted living hud loans assisted living residential assisted living sba loans assisted living small business loans assisted living Aug 07, 2025

Getting funding for your assisted living business can feel confusing and overwhelming. Where do you start? What loans or grants are available? How do you make sure the numbers work?

You don’t have to figure it out alone! This guide breaks down the most common funding options for assisted living startups and how to use them to get your business going. Whether you’re buying a home, leasing and converting, or buying an existing facility, I'm here to help!

Check out this video, too:

Why Funding Matters (More Than You Think)

Money isn’t just money here. It’s your foundation for success. Funding covers:

Buying or leasing your property
Renovating to meet licensing requirements
Operating costs while you fill beds

Without solid funding, your plans can stall. That’s why it’s key to have a good plan and know your numbers inside out.

If you haven’t built your business plan yet, grab your free Business Plan Checklist. It walks you through everything you need to secure funding.

Option 1: Traditional Mortgages (Buying a Home)

A traditional mortgage is like buying a house—except it’s for your business:

🏠 Rates are usually higher (7-8%) because it’s an investment property, not a family home.
💰 Down payments are bigger (15-25%) compared to regular mortgages.
🏦 Banks want to see solid credit and proof you can pay it back.

This is a common way to buy your assisted living home, but it usually doesn’t cover renovations or operating costs. You might be able to add a home equity loan later for those expenses.

Tip: Start talking to your local banks and credit unions. They’re often willing to lend if your business plan and credit look good.

Option 2: Hard Money & Private Loans (Fast Cash, Short-Term)

If you need money quickly or don’t qualify for a bank loan, hard money or private loans can help.

💵 These come from private investors, not banks.
⏳ Closing is fast—sometimes in days.
💸 Interest rates are higher (10-12%) and terms are short (6-24 months) with a balloon payment at the end (so you'll need to refinance).
🎯 These loans focus on the property’s value, not so much on your credit or experience.

Many beginners use hard money loans to get started fast and then refinance with a longer-term loan later.

Warning: Choose lenders carefully to avoid predatory terms. Always check references.

Option 3: Small Business Loans & Lines of Credit (Flexible Support)

Small business loans can cover renovation costs or working capital.

💼 Usually come from local banks or government programs.
🔄 Lines of credit let you borrow and repay as needed, great for ongoing expenses.
📄 You may face restrictions on how you can use the funds.

Combine these loans with other funding options (like a traditional mortgage) for a complete financing package. Use my free underwriting calculator to make sure your numbers add up before borrowing.

Option 4: SBA Loans (Long-Term & Low Rates)

SBA loans are my go-to funding source because they offer:

✔️ Good interest rates and longer repayment terms
✔️ Ability to finance both property and business
✔️ Great for buying existing facilities or franchises

Heads up—SBA loans require a tight business plan and good underwriting. If you’re converting a home or brand new, lenders might be tougher to find, but it’s not impossible.

Know your SBA types:

7A Loan: Most common, great for buying existing businesses.
504 Loan: For larger projects or portfolios, with better terms.
SBA Express: Smaller loans (<$100K) for operating capital..

You can also mix SBA loans with other funding sources to cover all your costs.

Option 5: HUD Loans (Advanced Option for Experienced Operators)

HUD loans offer fantastic rates and terms but come with more reporting and requirements.

These are usually better for operators with experience expanding or refinancing their portfolio.

If you want to learn more about HUD loans, comment HUD below, and I’ll cover it in future content.

Keep Going: Persistence Pays Off

I’ve been told no by dozens of lenders. But remember:

"No" really means "not yet".

Keep refining your plan, building relationships, and asking questions. Mix and match loans to get what you need.

Just be sure you’re confident your numbers work before you take on loans. Avoid jumping in blindly.

Next Steps: Take Action Today!

🚀 Ready to fund your assisted living business? Here’s what to do next:

✅ Download the free Business Plan Checklist to build a solid plan.
✅ Use the Underwriting Calculator to nail your financials.
✅ Join the ALI Basics community for Q&A, resources, and support.
✅ Join the Assisted Living Investing Mastermind to get expert coaching and fast-track your success.

Got questions? Drop them in the comments below ⬇️ — I’m here to help!

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