How to Fund Your Assisted Living Business: SBA Loans vs. Grants

Transcript

00:00:02
hey friend it is Brandon Gustafson with Assisted Living investing excited to have you here with me um on the channel today today we are going to be talking about the ultimate guide for SBA versus um versus grants which one of those is going to work best for you and your situation uh and kind of help you out and give you some guidance here it's something that I get I get this question all the time from people uh they want to know which is which is the best one for them is it grants is it SBA so we're

00:00:30
going to really dive into that topic today before we get started though I want to remind you to go and grab the free business plan checklist you can get that at Assisted Living investing. netb checklist we've got a a thing going down across the bottom here for you uh for that and I'm going to add this up so you can see that as well again it's Assisted Living investing. netb checklist go grab that free uh checklist to help you out in launching your Assisted Living business um and as we dive into this a

00:00:59
little bit more if you are new here uh type in newbie would love to to hear who you are love seeing the new people here on on the channel and and being able to help you and and give you some guidance and as you're going through this we're going to have some time for Q&A at the end of the call so make sure you type in those uh those questions that you've got and we will have time to get to it if you cannot make it uh and and get those questions in for the live please put them in after the fact because it's how

00:01:24
I uh can create more catered content to you I will respond to those um inside of the comments but but also if I see really valuable good questions um we'll make a video specific for you that's how a lot of these lives um come to fruition so with that said um let's go ahead and dive into it for those of you who are new to the channel uh my name is Brandon Guston I own and operate two assisted living facilities I've been doing this since 2020 um I have secured over1 and a half million dollars in SBA funding so

00:01:55
I've done that I've done three SBA Loans I have secured over 1.2 million in grant funding as well for my businesses that are small for-profit businesses um so I've done that I've also done multi-million dollar contracts through my professional career so I have have a lot of experience in the world of Grants as well I operate my businesses out of state I live in Utah one of my facilities is in Idaho the other one is in Colorado so I've been not only doing this for a few years but do this out of

00:02:24
state and and operate um that way and I have a masters in healthcare administration so I have a lot of really good experi in the industry uh and and helping people move things along and and reach their goals a lot of background in the industry so excited to to be with you today um all right let's get into the topic so number one let's start off with what the SBA is the SBA is the small business administration it is a federal agency that is like the entire purpose of the SBA is to help small businesses

00:02:57
start and grow and allow them to to succeed uh it's what it's a mechanism that that was put into place back in uh 1953 under the Eisenhower Administration to really buoy up small businesses providing them small businesses Lo small business loans allowing them to make the progress that they would like to make uh so they can get the funding that they want so they can create their dreams and and ultimately it benefits the economy um the the United States economy when you're able to do that when when there

00:03:28
are successful small businesses and it's it can be hard to get those loans through other mechanisms so that is what the SBA is that's that's its intended purpose and uh how you can really move things along with the SBA we're going to get a little bit into how it actually works um who administers it and what that looks like a little bit later on in the video but at its core that's what the SBA is now let's talk about what grants are grants are free money and I I put that in quotations because uh

00:03:58
depending on your tax status if you're a for-profit or nonprofit organization there could be taxes that are at play when it comes to getting grant funding um also there's there's there's a lot of uh time and effort that goes into obtaining and maintaining a grant and you have to use it for specific purposes it is not hey here's a million dollars go do whatever you want with it it is here's a million dollars but you have to use it for XYZ and if you don't you will get in trouble you could have to pay

00:04:29
those back you can pay additional fines even up to I believe prison time so um there's there's a lot that goes into that so it is free money um but there's a lot that that goes into it and it is given to individuals or organizations um and it is for specific projects or purposes so you do have to indicate this is what I'm going to use that money for and then you have to prove that you are using the money for that we can get a little bit more uh into that here as we get deeper into the video as well okay

00:04:59
so can go out and it can go to individuals so it does not have to be um to to an organization I what I see is more frequently it is to organizations but does not have to go to organizations so just want to be clear on that um they can be government funded grants or they could be private and I know just like current events um as we're recording this live here in uh what is it January of 2025 um there's been like some stuff in the news about the Donald Trump Administration um putting a pause on

00:05:31
grants and like yes there's going to be a pause on it but it's going to continue and that doesn't that's for a small set that are subset that are federal grants as well um so there's there's so many other grants out there so don't let this this current event thing that you're hearing in the news today be the thing that says up I can't get a grant um wait a month wait two months go find a different Grant somewhere else they're they're going to be out there the thing

00:05:57
with grants though is you have to be consistently looking for them because they just cycle and and they're they can be hard to find okay so that's grants um you have to go through a a an application process when you're getting a grant and those are going to be specified by the granting organization they will tell you exactly what you need to give them to prove that you need the funds and that you're going to do the thing that they want you to do with that money um so you do have to go

00:06:24
through that process it's it's a simple application process that's what I give away a template for a grant writing a grant writing template go to assisted living investing. netg grrs and you can get access to that if you want um access to that just type in Grants down below and we'll make sure you get that link for you um let's see and grants I was doing a little bit of research on when they started um it's a little bit mixed generally what I found is it was like the beginning of the 19th century and

00:06:51
generally these grants were initially land grants the government would say Hey you know Louisiana Purchase we bought hundreds of thousands of Acres of land and we will grant an acre to you and your family so you can build a farm on it and and and progress so that's what grants initially started off with as far as I can tell they originated in the United States but I I couldn't find anything else um previous to that so it was a little bit fuzzy on the history there but then it has turned into um

00:07:22
away from Land over to money and allowing businesses and things like that to grow so that's a bit of a history there for for Grants all right now let's talk a little bit about when to use each of these we're going to start off with the SBA so when should you be using an SBA loan SBA are they are intended for small businesses um and it's it's hard to Define exactly what a small business is and it really it's going to depend on where uh what what lenders are are comfortable with lenders are going to

00:07:54
have their own sets of criteria so the way that the SBA works is you have SBA is is funded it's it's financially backed by by the federal government for a lender okay and the lender signs up and they fill out paperwork they become an SBA certified lender and what that means is they can now lend an SBA loan that is federally backed to a small business allows them to take a little bit more risk in and working with small unproven businesses business Concepts people that are brand new to business um

00:08:30
that are they're just trying to figure things out it allows them to take a little bit more risk because in in the back of in the back of them they have some f Federal money to back them and to say hey if it doesn't if it doesn't work out we've got you covered okay so that's at a very high level how that works what it means for you um there's there's no extra protection for you as the as the borrower um but it does give you more opportunities for a lender to be like yeah we're willing to take the risk with

00:08:57
you um as long as you've proven to us that you can do these things um that you have a good business plan and you the financials look good and things like that then we're we're willing to work with you so that's that's kind of how it works okay these can be for uh the funds for from a grant can be used for startup expenses operating expenses construction and Improvement um I know I have a buddy that's in Idaho that is is obtaining around $4 million is going to do some construction by he's going to get the

00:09:27
land then from there he's going to build up um start the facility get everything going um operational expenses and everything about $4 million all of that with an SBA loan I did SBA Loans and we used it to purchase our existing facilities and the businesses plus we got some extra operating Capital so you can be pretty flexible in how you do this but you do have to be working and communicating upfront you need you need to understand from the beginning you have to have this Foundation this why I

00:09:53
talk about foundations all the time um and you have to build a business plan and understand the underwriting and finances so that when you go to a lender you're not just saying yeah I mean the the house costs a million dollars so I guess that's all I need you need to go in and say okay I need a million dollars to buy this but I also need an extra $60,000 for operating expenses and and this is the this is my reasoning for why I need that you have to build this Foundation you have to understand the

00:10:21
numbers because they will ask you questions so you have to understand all of this information so that you can then answer those questions gives them confidence and as you progress with the lender it's very much a relationship as you're progressing with the lender they have confidence in you how are you going to use those funds and you have to justify it almost at every turn they will ask you several times you're gonna get asked by a ton of different people that are saying well why do you need

00:10:46
this what what are you going to use that for um could you do it with less like they're going to poke holes in everything that you do so you have to have this really solid business Foundation which is why go grab that business plan checklist Assisted Living investing. netb P checklist it's going to help you really start building that business plan so you're ready to have those conversations with lenders okay beyond that this is also an opportunity if you can't get funding elsewhere um an SBA can be hard um so

00:11:15
this isn't just a oh you know it's my backup plan it's the SBA it's something you should be having conversations with pretty early on as well and you want to be involved with them but the more that you can can talk with them they're a great resource for you um a lot of lenders are are great at educating you on exactly what the SBA process is like and what their requirements are and helping you understand what that's going to look like so they can help you out there you are restricted with the SBA

00:11:40
you can get um I think it's up to five and a half maybe it's 5.2 there's a number it's five point something I can't remember the exact number and I think they change it on a regular basis on an annual basis they reevaluate but you can only have that much money to your name on a deal um and so like if I have a million dollars and I partnered with my dad and we have this million dollar it's not a split you know we each have 500,000 we each have a million dollars to our names and so you want to keep

00:12:08
that in mind as you are working and maybe doing a joint venture which we talked about in our video last week um on different types of Partners you could work with it is if you have somebody that already has4 and a half million dollars in SBA funding to their name then maybe they're not a great option for you to have on the loan with you you because they could be hitting that ceiling for SBA and that could create some potential implications for you that's a little bit deep inside of the world of SBA but it's something that I

00:12:39
want you to be aware of as well there are restrictions around you can't just go unlimited amount of funds with the SBA there are parameters that you have to fall into as you're getting into it now let's talk about when to use a grant so grants are oftentimes it is it's so much easier if you already have an established business when you're trying to get grant funding if you are a brand new business I opened yesterday and now I'm trying to get funding through a grant um it's it's

00:13:08
possible certainly possible and like I mentioned grants can go to individuals as well but what you're going to find is granting organizations are going to be less excited to work with somebody that just opened their doors yesterday and has no history because they have no indication as to if you're going to use that money the way that they would like you to use it they have no way of verifying that so so if you've been in business for a period of time it's going to improve your chances because you can

00:13:33
show hey this is how we performed in the past this is how we really need these funds this is what we're going to use it for uh we've seen that this could really benefit our community um through through you know doing XYZ with the grant funds you're able to justify that and demonstrate it so it can really help you out in in getting those Grant funds as opposed to just opening the doors yesterday and trying to get Grant funds so that's something I want you to be aware of as well um they really can improve the

00:14:03
business and the benefit of others so grants can be used for construction they can be used for programs they can be used for a variety of things but as you are trying to obtain a grant you have to find a grant that is specific for the thing that you're trying to use it for so if I need construction one of my grants was construction was improving um our home and I have a video on the channel about just like the tour of my facility um so so go watch that one for sure um but in there you can see we used

00:14:30
the grant funds it was about a million dollars to make improvements to the house and we moved the residents out for about three weeks and we gutted everything we took out all the floors we we took out all the electrical Windows um we we did the kitchen was completely gutted um we did new paint just all kinds of stuff it was it was a huge Grant it was um through it was an arpa ERA um Grant which is a Federal grant administered at the state of Colorado so we were able to obtain that funding to do that and and make all of those

00:15:01
changes and improvements to the house which has been incredible um another grant that I got was specifically for um helping us digitize a lot of the work that we were doing inside of our facility in working with a program with a an EHR vendor to help us get the information we need there getting things like computers and printers inside of the facility so we could use that um tablet so our our residents could do tele Health visits with their with their providers without having to leave the house um again another arpa era um

00:15:32
funding project but there are so many opportunities out there you just have to learn how to look for them and how to go find them but as you're getting them you have to be very specific this is the these Grant funds it's not hey here's a million dollars go run your business it is here's a million dollars to make improvements to the way that you do training with your staff which is going to hopefully allow you to um recruit better staff and and work with them um and and and improve their likelihood of

00:16:04
staying at your company th those types of things that's what you're going to find a grant for a million dollars is probably too much but you get the idea it's here's money it's for this specific purpose now the money that you were initially going to spend those expenses that you were going to have for your business that were going to go to that thing now you don't have to spend your money on that you can use that money elsewhere but that's that's kind of how grants work for very specific purposes

00:16:31
and there's a lot of rules and and um fences around how you can use those funds so you have to get a little bit creative and how you're going to work through those um and you can do this nonprofit for-profit I've worked for nonprofits throughout much of my professional career so I've been in the healthcare industry for over a decade um have a lot of experience there with nonprofits and have secured hundreds of millions of dollars in in funding through through Grant pro programs um

00:16:58
have been an Analytics expert on those have helped um secure that funding so I understand the process there I took a lot of Grant Training and then use that for me my for-profit small business and have secured 1.2 million so it's very possible to do it in both Arenas you don't have to be a nonprofit um you can be a for-profit if you're going to be a nonprofit again the longevity of how long you've been a nonprofit is going to speak volumes to your ability to do it probably easier to get a grant if you're

00:17:25
a nonprofit but not a requirement um and if you're a nonprofit it's going to be easier three plus years that's where it starts to really uh get into a groove of okay I know how to find grants I know how to obtain them I know I can I can get on these Registries and and people are going to reach out to me to to help me get the grant funding that I need okay so that's how that's when you can be using a grant let's talk about now the the SBA process so the way that you're going to get an SBA loan is

00:17:53
you've got to go find a lender number one um so well I say number one but like I mentioned just a second ago you have to build that Foundation First you need to build this business plan go grab the business plan checklist Assisted Living investing. netb checklist you want to build that that business plan you want to figure out what you want to do then you want to get the underwriting in in in place and you really really need to understand the financials you need to understand what those expenses are going

00:18:23
to look like to see if this is a viable opportunity this is as much for you as it is for the bank because you need to determine if this is going to be financially viable for you are you going to make money on this or not and if not then don't try to fit a a square peg into a round hole it's just not going to work so make sure that it is it aligns with what you want from a financial perspective that's what underwriting is you're you're evaluating that deal from a financial perspective is it going to

00:18:48
work for me or not you're going to build that business plan and once you find that you're G to go find the opportunity you're going to go out you're going to start talking with Brokers you're going to start talking with agents you're going to go find the right house maybe you're going to do a conversion you're going to find the right business that's for sale you're going to buy that and and do a change of ownership on the license maybe you're going to buy some

00:19:05
land and you're going to build something from the ground up you're going to find that opportunity and once you have all of those things in place now you're gonna go talk to a lender you're gonna say Hey you know here's my business plan here's my underwriting super confident on the numbers I feel really good about it um this is the opportunity like it's been operating for the past 10 years the person's retiring it's a great opportunity or this house is just like

00:19:28
perfect for assisted living um it's got six bedrooms in it and and we're going to be able to to Really hone in on on how we're going to run this facility with with with this group of people here and and you're going to take that as a package we're going to present it to A lender and now you're working with that lender to get the approvals and working with a lender they're going to want to see all of that information I just told you about they're going to want to see

00:19:51
your uh what's called a personal financial same I have a video on the the channel about that how to fill that out as well um you're going to need to get um bank statements and tax returns and all of these kinds of things are going to run your personal credit because you are a personal guarantor on on these types of deals so they're going to look at that so you want to make sure you have pretty good credit um and if you don't have that start building it up or find partners that have really good

00:20:15
credits to to come in and help you out with it and you're going to hand that off to them and 90% of the time they're going to say this is impossible what are like why are you even trying to do this you're going to get told no so many times um but what you're going to find is you're going to get a handful of lenders to say yes and when you get to that point it's super exciting and you're going to have to give them all the paperwork again and then it it gets to a pre-approval and you're cool I got

00:20:43
the pre-approval and now I'm ready to go and then it's going to go to underwriting now you're super stressed because their underwriting has to go through all the numbers and things hopefully you've been more thorough than they will be though and so it's it's pretty easy to do that so you're going to get that done and then you're going to have to sit and wait for a little bit of time time and then you're going to get ready to close and then you got to give them all the paperwork again so

00:21:03
this is why you want to have all of this information because you're going to have to give it to them three four times um over the course of the time that you are working with them and and you want to make sure you have all of that you can very easily answer those questions and when they ask you what population are you going to serve where is this located at what type of license do you need you've got all of that already inside your business plan it's super easy you don't want to tell them hey why don't

00:21:24
you read the business plan you want to just you look at it and say oh yeah our license type we're going to working with elderly individuals it's a type B license it's whatever license type it is that that whatever question they have you're going to answer that it's going to come to you from the business plan so you want to have this Foundation really really helps you understand when questions come gives you this platform to to Really launch yourself forward and and start that Assisted Living business

00:21:50
okay so that's that's what you're going to do with the SBA process now when we are talking about grants and the process with grants you have to start searching for Grants um that that's where you're going to start out um it's good to have that business plan good to have the underwriting but oftentimes like I mentioned it's better for you to have an established business so in that sense you probably already have a business that's operating okay if you don't um

00:22:13
you're still going to want to find a grant you got to go find the opportunity and like I mentioned just a few minutes ago grants they are cyclical um if you look today and you think oh man I can't find it I spent all week I looked everywhere I can't find a grand and you're like I guess I can't find a grant you know they're they're impossible to find guess what the next week there's going to be another set of grants that come out uh or tomorrow and so you have to stay up um it's good to actually set

00:22:42
alerts for grants for grant opportunities the type things that you want uh you can set up like Google Al Google Alerts with keywords for the types of grants that you want um and so that's a really useful tool and you're going to you're going to want to stay consistently looking for those grants and you have to be istent or else you will not find them because if if you wait too long opportunity goes away or you're going to miss a deadline or you're going to miss something and so

00:23:07
while you're in that frame of mind of trying to find a grant you have to do it and it could be something you find today or it could take you nine months to find it that's the thing with grants is they it it's really hard to say what's out there and you just have to continuously look and it can be stressful and depressing um and difficult to do but if you're consistent with it you can find those opportunities that are going to be great for you once you find that perfect Grant they will tell you what they need

00:23:35
from the for the application they'll they'll have the paperwork there they say this grant can be used for XYZ um then you have to do you know we we need to answer these 10 questions here about grants this is why I like to have a grant proposal put together so go grab that free resource Assisted Living investing. netg grants it's a a free grant writing template I like to build that in there it it tells me I'm able to answer the questions like you know what what am I going to use the the funds for

00:24:07
what am I looking for how how's it going to improve people's lives I'm GNA answer all of those questions that the chance of me using my application my my my proposal that I've written out into this you know five 10 page document is perfect beautiful is you're probably not going to submit that they're going to have their own little form questions a lot of times I see this Google forms um just other uh just other places where they can submit create some kind of a form that's that's for free um and

00:24:36
they'll ask you to put it in that way sometimes they'll ask you for an attachment other times it's just fill in the questions but if you've already done that upfront work and created that proposal it's going to be really easy to just copy and paste it in there maybe you're doing a few edits and allow you to to submit for those grant opportunities so you want to follow their Grant process don't try to fit yourself and say well I you know Brandon already told me I can do this and it's

00:25:00
going to work they're going to say who's Brandon I don't know you know so you want to make sure that you're doing the work up front and and getting ready to submit this grant proposal and then follow their application process that's how you're going to get this done and then you're G to submit that and then then you have to wait so this is one of the things that is also frustrating about grants is sometimes it's they'll tell you here's the deadline and we're

00:25:24
going to review them on this date and so you submit it and you just like hope sometimes they don't even have an email for you to to follow up with you just kind of send it out there in a hope that somebody's actually going to read it and you just wait and as much as you can you want to follow up but sometimes it's impossible sometimes these places don't give you opportunities to follow up with them so um there's a lot of waiting involved and then you what you absolutely should not do is start using

00:25:50
start paying for things that you want for the grant start paying for it now or start a project because once you do that you're not going to be able to use the grant funds for that thing a lot of Grants are based off of reimbursement so you get the approval then you can start the project you're going to pay for it this is where I've used unsecured loans and hard money um in the past to to pay for these types of loans these types of projects then you're going to submit those invoices back to the granting

00:26:19
organization they're going to reimburse you and then you can pay back you know your hard money lender your your unsecured Loy uh and or just recoup the money yourself um whatever situation you're in but there's a lot of waiting and a lot of Hoops you got to jump through and things you got to do and make sure you're taking the right steps at the right time when it comes to Grants they can be confusing they can be overwhelming can be can be really difficult so if you need help with

00:26:42
either of these things um working with the SBA or with grants I have awesome product for you uh if you go to Assisted Living investing. net Launchpad uh that's the Launchpad bundle that I have so in there we have the business foundation's basic Workshop which is all about building a business plan and the business planning guide which is all about underwriting and how to do that have give you an underwriting course I give you market research guide where should you be getting started and I give

00:27:07
you the grant funding foundations course as well which teaches you all about grants how to go find them how to how to submit a proposal um how to manage that Grant after the fact um and and how to continue and make sure that you're successful there so incredible product there for you um go to Assisted Living investing. net Launchpad and if you go and grab the business plan checklist or the grants template um and download one of those I have a special discount for you um after you get that so make sure

00:27:34
you go and check out one of those and you get a special discount on the Launchpad um so make sure you go and grab that okay it's a lot talking a lot going on here um so for those of you who are live here if you can type in your questions uh as we go and if if there are as as you're typing those questions uh I want to remind people to like the video subscribe and ring the bell as well so you get notified every time we put out content so I do uh lives here on Tuesdays um and then we put out content

00:28:01
on Thursdays as well so I want to make sure you grab those uh when they come out and every now and then I'll throw out special ones um for you to to Really you know help you accelerate your ability to getting you know reaching your investment dreams and launching your Assisted Living business I love doing it and helping people out so like the video subscribe ring the bell so you get notified and uh would love to help you out along your journey um so with that said uh I know there's a few of you

00:28:28
in here with and wanted to make sure that I'm getting your questions answered so uh type in your questions as we go and I will get to those here in just a second okay all my new setup and I'm trying to like navigate things okay well um I don't have any questions we got a bunch of you in here um but without any questions I'm going to go ahead and close out um I want to thank you for watching uh thanks for being here and I wonder you know does residential Assisted Living sound interesting to you

00:29:02
but you just don't know how to get started you're trying to figure things out that Assisted Living investing I'm here to help beginners like you launch their Assisted Living business in the next 12 months I love doing I love coaching people helping people and and helping you achieve your dreams financial and and time flexibility that that you're looking for so make sure you go grab the the two resources those free resources for you Assisted Living investing. netb checklist or assisted

00:29:26
Livin investing. netg um either of those based on or both of them um can really help you out and give you a leg up as you're trying to figure out how to to get into this and how to make it all work for you as you're on your investment Journey so uh and remember it doesn't take a lot just a little bit just keep going step by step by step and I promise you if you do and you're consistent and persistent you're going to be successful thanks for watching and have a great day