Using the SBA to Fund Your Assisted Living Business
Mar 31, 2025
Embarking on the journey of starting an assisted living business can be both exhilarating and fulfilling, yet one of the most significant hurdles you may encounter is securing adequate funding. For many entrepreneurs, navigating the financial landscape can be daunting. Fortunately, the Small Business Administration (SBA) provides various loan programs designed specifically to assist individuals like you in obtaining the necessary capital to turn your vision into reality.
In this comprehensive blog, we will delve deep into the mechanics of how SBA loans operate, guiding you through the specifics involved in finding the right lender for your specific needs. Additionally, we’ll outline the steps you can expect throughout the process, equipping you with the information and confidence to navigate the financial aspects of your assisted living venture.
Check out the video, too:
Understanding SBA Loans
The Small Business Administration (SBA) is a federal program that helps small businesses obtain financing by guaranteeing a portion of the loan, making lenders more willing to lend. While an SBA guarantee increases your chances of securing a loan, you remain personally responsible. Defaulting on a loan can affect your credit and make future borrowing difficult. However, the SBA may provide more options than conventional loans.
Finding an SBA Lender
Not all banks and financial institutions offer SBA loans, so you’ll need to find a lender that does. Here are a few ways to do that:
- National and Local Banks –Large banks like Wells Fargo and Chase offer SBA programs, but smaller regional banks and credit unions often provide a more personalized experience.
- SBA Lender Search – A quick internet search for “SBA lenders near me” can provide a list of approved lenders in your area. Look for rankings of the top SBA lenders in your state to identify the most active institutions.
- Lending Brokers – A lending broker can help connect you with banks that fit your specific needs. These professionals already have relationships with multiple lenders and can match you with one that’s willing to fund your assisted living business.
- Direct Outreach – If you prefer a hands-on approach, reach out to banks directly with a concise introduction. Explain your business, funding needs, and whether you already have a business plan and underwriting completed.
Some well-known SBA lenders specializing in assisted living include Live Oak Bank and Celtic Bank. These institutions have a strong track record of funding senior care businesses and can be a great starting point for your search.
What to Expect in the SBA Loan Process
Once you’ve identified a lender, the next step is to start the application process. Here’s what you can expect:
- Pre-Approval – The bank will review your business plan, financial projections, and credit history to determine if they are interested in working with you. A pre-approval letter is not a guarantee but can be helpful if you need to approach other lenders later.
- Down Payment Requirements – While SBA loans advertise as requiring as little as 10% down, most assisted living acquisitions require 15-20% down. It’s crucial to have this capital available before applying.
- Paperwork Submission – Expect to provide detailed financial statements, business plans, and other documentation to support your loan request.
- Final Approval and Funding – Once all documents are reviewed and the lender is satisfied, the loan will be finalized, and you will receive funding to proceed with your business acquisition or expansion.
Tips for a Successful SBA Loan Application
- Have a Strong Business Plan – Lenders want to see that you have a well-thought-out strategy for success.
- Use an Underwriting Calculator – This can help you determine if your business will be profitable.
- Build Relationships with Lenders – Developing connections with local banks and SBA lenders can improve your chances of securing funding.
- Be Prepared with Financial Documents – Having your financials in order will streamline the process and demonstrate professionalism.
Final Thoughts
SBA loans can be an excellent way to fund your assisted living business, but understanding the process and preparing in advance is key. By finding the right lender, building relationships, and having a solid financial plan, you can increase your chances of securing the funding you need.
If you need help creating a business plan for your assisted living business, download your Business Plan Checklist to ensure you have a solid business plan to help launch your assisted living business.
Need help figuring out where to start? Join the next Roadmap Challenge and build your launch plan with me.
Show full transcript 👇
Transcript
00:00:00
hey friend I'm Brandon Gustafson I help beginners like you launch their Assisted Living business in the next 12 months in today's video we're going to be getting into the topic of SBA funding how does it work how can you leverage that to launch your Assisted Living business so if you need some guidance on that or any other type of funding make sure you stick around for today's [Music] video hey friend welcome back to the channel excited to have you here today and talking about SBA funding and how to
00:00:29
leverage that to launch your system living business before we get into that I want to remind you to get over to the website assisted Liv investing. net where you can get access to our free underwriting calculator to help you understand if you have a profitable business but also give you a solid foundation that you can give to lenders like an SBA lender to say I need this much money and they will tell you yes a little more complicated than that but this is the tool that going to really help you reach your goals and and obtain
00:00:56
uh the funding that you need to launch your business all right let's get into the topic for today's video we are talking today about how to use SBA funds to obtain to fund your Assisted Living business acquisition I want to note something for you while in this video I'm going to be talking specifically about SBA funding what that looks like and how it works all of this applies to a bunch of different types of funding opportunities that are out there for you so whether you're working with
00:01:22
conventional mortgage you're working with private money lenders you're you're doing something else that's a little non-traditional everything that I'm going to teach you here applies to that situation I'm just going to be using SBA as the example for how this all works all right so what I want to start off with here actually is just kind of an understanding a based understanding of what the SBA is because I think there's a lot of confusion out there the SBA is a federally backed program it's not a
00:01:47
federally funded program it's federally backed this for you as the borrower honestly doesn't mean anything to you other than the fact that lenders may be a little more open to taking a little bit more risk with opportunities because their funds are federally backed what that basically means is if you were to default and you can't pay things then the lender can go to the federal government and say hey we were working with this person they they wanted the funds we gave it to them it didn't work
00:02:18
out they defaulted on the loan we need you to reimburse us now that's like in a nutshell kind of how it works so I'm I'm sure I'm oversimplifying it but that that's kind of the idea behind it doesn't mean anything for you it's still going to destroy your credit still going to you know be a huge ding you're never going to be able to get an SBA loan again other loans are going to be really hard to get so it you know that that's the negative side of this but the
00:02:40
positive is Banks may be willing to take on a little bit more risk for opportunities for small businesses that's what SBA stands for small business administration they are for small businesses that is what they are they're intended to be for all right let's talk a little bit now about what banks are SBA lenders so not all banks are going to be an SBA lender it's it's not just a blanket hey you're a bank you're an SBA lender that is not the case you can have large Banks large
00:03:05
National Banks that do SBA funding that is that's very possible that you can have those you can find them you know your Wells Fargo Chase they will probably have an SBA program that you can look into so you get those those big large National brands that are out there that can can help you do the funding the other one are small local banks and Credit Unions even can be SBA lenders these are the ones that I personally suggest that you start with working with and start trying to develop relationships with because you can
00:03:34
develop a relationship with them these small banks these small Credit Unions you can get in there you can go visit the local branch you can know where their headquarters are you can go chat with them um these are all really important things in building relationships which is a key part of getting the SBA funding so again not all lenders are but you could be looking at large National Banks you could be looking at small local tiny Banks uh that just have like three branches any of those can be SBA lenders and the best
00:03:59
way that I've actually find an SBA lender is to just do a very quick internet search that says SBA lenders in my state or near me and it will give you a list of often times you'll find like top SBA lenders in your state and that's going to really help you identify which lenders you should be reaching out to and spending time with rather than just cold calling or reaching out or trying to figure things out look for one of those top lists you know top 10 top 100 list or whatever it is and and see who
00:04:26
those banks are and then start reaching out to them and start building relationships there that's how you're going to find these lenders now what I want to talk to you about is a little deeper into specifically how to find these SBA lenders number one we talked about this in a previous video about the different lending types and how to obtain financing but a key person there is a what's called a lending broker so lending Brokers sometimes they work for banks sometimes they're private
00:04:48
individuals but they have built relationships with a bunch of different lenders a bunch of different banks they know what the criteria is of the bank they'll have conversations with you see what you're trying to find and then they try to make relationships there so that you can find a lender that is willing to work with you for the type of situation that you have we worked with a lending broker when we were very first starting and trying to figure things out and it saved us so much time we had warm
00:05:15
introductions to these lenders we had worked a little bit with some banks before so I knew what to expect the paperwork and things like that so that warm introduction plus me giving them the documents that they wanted within a few hours was something that they were like whoa they just kind of blew them away and that's what you're trying to do here but working with lending Brokers is really big the second way for you to do this is cold Outreach so like I mentioned you can do that internet
00:05:40
search you can say top SBA lenders near me in my state whatever and you can start reaching out to them and you can just have kind of a canned message that you send out to all the lenders and say hey I'm Brandon you know I am looking to do assisted living facilities and I want to do a residential home I'm looking to buy existing facilities my budget that I'm looking for the amount that I need funding for is $500,000 a million whatever it is I've created a business plan I've done my underwriting I have an
00:06:07
opportunity actually and and I would love to chat with you and see if it's something that you guys can um fund or not like that's kind of the email it just needs to be something that hey here's me here's what I'm looking for can you help me if so cool let's have a conversation if not that's fine too I don't want to waste my time with you um so tell me no upfront so that's something that you want to build into places you're trying to find these lenders now as you are looking to do
00:06:32
this at Cold Outreach piece can be really scary seem overwhelming especially if you live in a state where there's hundreds of SBA lenders so I would start off with the ones that you maybe have relationships with already uh this could be somebody that you already bank with or it could be the Local Credit Union that you pass down the road every single time you go to Walmart or to the grocery store those are places that I would start and then from there start going down the list a little bit further when I did my franchise business
00:06:59
I started out that way started talking building relationships with banks that I knew or was familiar with went pretty far down that path but the one that we ended up getting funding with was a bank that I was aware of but had never talked to in the past and that's the bank that that we worked with and it started off with cold Outreach and just reaching out to them and building a relationship out of nowhere and that was just me doing that on my own so it's very possible for you to secure this type of funding just
00:07:25
through outreaching doing some cold Outreach and figuring out who those FBA lenders are near you now with that said there are a couple SBA lenders out there that are really friendly to Assisted Living if you've been looking into this for any period of time you probably have heard of them the two that really stick out in people's minds are live o bank and Celtic Bank those two they they work a lot in Assisted Living they do a lot of SBA loing lending they are good people for you to build relationships
00:07:51
with and the other thing that's really interesting is you will reach out if you go to Live Oak bank and you start reaching out to them and trying to get into senior living you will get into the exact person that everybody else talks to it's a very small world when you get into that so it's something you want to keep a keep in mind uh but you want to build that relationship with those people I'm not going to drop a name here CU I can't remember exactly what it is and you know five years from now it
00:08:15
could change but live o bank and uh Celtic Bank are two that that are really good for you to reach out to we actually have one of our SBA Loans through Celtic bank and they've been great to work with there as well all right now let's talk a little bit about working with the SBA what is that process actually look like and what can you expect when you do that number one is you're going to start working with them you're going to give them all the paperwork they're going to review it everything you know we're
00:08:37
going to see where that goes but beyond that once you get to that point and and you've given them everything they reviewed it they like it they want to work with you you will get a pre-approval letter at that point getting a pre-approval letter is not what it's like when you are trying to find find a house and you get the know I'm pre-approved for 500,000 300,000 however much you want for your house is very different from that they are kind of on a case-by Case basis and that pre-approval letter is for that specific
00:09:06
bank now you could Things Fall Apart with that bank you could go to another bank and say we we have this opportunity we were pre-approved with this Bank things fell apart but I have the pre-approval and here's all the paperwork um can we work together and that that you have that pre-approval UPF front is going to make things a little bit easier but you want to get that pre-approval letter you're also going to be looking at doing the down payment so something to understand with the SBA from a down payment perspective is they
00:09:32
will tell you they'll advertise we can do as low as 10% down or or something like that my experience especially for assisted living you're looking at closer between 15 and 20% my Acquisitions have been like 17 18% down so yes entirely possible to get to 10% down it it is it's conceivable you could get that but the the chances of doing that I would say are slim you're probably looking at closer to that 20% range that's probably what you should be looking at or what you should be planning on so a million
00:10:03
doll acquisition 20% down is $200,000 down this just kind of what you should be looking at from a down payment perspective there's also two different types of SBA Loans one is the 7A that's the one that I've done 7A will allow you to include real estate get some extra funding for operations which we've talked about in previous videos as well so allows you to do all of that they are it's often times for new borrowers as well so really good loan product for you to consider there the 7A loan the second
00:10:32
one is called a 504 loan 504 loans are often times for much more established business they typically like to see somebody that has been in business for three or so years three or more years it's a really good refinance option has slightly better terms and rates than a 7A loan but it is hard to get if you're brand new at doing something they really like it to be something that's established and they like the borrower to be a little more established that's my experience working with that you may
00:10:58
have a different experience here your mileage may vary but that's been my experience with it those are the two different options that you could consider and have conversations about and the more that you go into this and you're like ah I know there's 7A loans and five four I I don't know which one would be best for me that in the mind of the lender is going to trigger okay this person knows what they're talking about I don't have to go all through all the basics um and it makes them just maybe
00:11:21
be a little more excited to work with you and gives you a little bit more credibility as you're trying to to move things along with them now as you're starting to work with the lender there's a lot paperwor so as you get into this part with paperwork though there's a lot there's the buyer paperwork that's you and there's the seller paperwork that's the person you're buying from you're both going to need paperwork there's business plans and there's underwriting
00:11:44
which we teach about in our foundation piece so go check out the business planning guide as well Assisted Living investing. netb PG we'll link that down below but go check that out and build out that Foundation they want that from you they want your personal financial statement I have a a video that I've done on that in the past as well it's a specific Federal Form that they want not just a you know willy-nilly thing it is a very specific form they want your bank statements they want your tax returns
00:12:08
they want just there's going to be other forms and things that they're going to ask for from the seller they want tax returns they want pnls they want just all their financials they want the license the there there's a lot of stuff they want from a seller as well so you as the buyer you need to be the one that takes charge of this and not blame a seller for not getting it you need to be the one that's hounding them and trying to get it so that you can get all of the paperwork over to the lender in a timely
00:12:34
manner so that they have what they need to help you be successful okay so that's something that you want to be aware of there's a lot of paperwork that goes into this process and it's something that's kind of hard to navigate and understand that's why the Mastermind program is a great option for a lot of people because I I've done this multiple times I've done three three SBA Loans one and a half million in SBA foney I know what I'm doing I know the process and how to help you get through this and
00:12:58
once you have gotten through all of that stuff you got the pre-approval you got the you know which loan you're going to go through all of that stuff everything's there they give you the approval you're moving towards obtaining the the closing on the business you're going to get a final needs list that final needs list is going to be a for a six-page document it's going to say we need all of these paperwork we need all of this stuff and you're going to be like I gave it to you they said we need
00:13:23
it again we need the updated version and so you're going to have to put all that together that needs list is really important important for you to get together it's a thing that you're going to get a month out from closing and you've got to you are in a time crunch to get things done and you have to get it done you have to work with your closing agent to get those things in place super important for you to be working very closely with the lender as you get into this and hounding the
00:13:47
seller and making sure you are extremely responsive to anything that they ask you if you don't your deal could fall apart despite all the work that you do to this point doesn't mean that you're going to get the funding you have to get this piece P right at the very end extremely important that you do that that's a lot of stuff right and guess what there's so much more I couldn't fit it all into one video if you need some help and guidance as you're going through this The
00:14:10
Mastermind program is the best place to do that uh cuz I can't create videos on all of this stuff for everybody but I can give you the support and the guidance that you need as you're trying to move things along in your for your Assisted Living business your Assisted Living Journey you can apply for that at Alim mastermind.com application and kind of learn a little bit more about the the whole process there what that looks like and how it works and if there's good alignment there then we can chat about
00:14:34
what that looks like now to recap what we've been talking about here we have been talking about lenders specifically SBA lenders but again this applies to any type of lender you got to be responsive the process is going to be slightly different but if you're prepared for an SBA loan then you're going to be prepared for anything else because they're going to ask for the most so hopefully this has all been helpful for you would love for you to comment down below what has been like
00:14:55
the most insightful thing for you here was it the different types of SBA Loans Lo is it the different types of SBA Loans was it that needs list at the end getting things done is it how to go and find a lender which of those things is was most useful for you I'd love for you to comment that down below and remind you to like the video subscribe and ring the bell as well it just helps you get notified every time we put out this content we do our lives on Tuesdays where you can jump on and ask questions
00:15:19
long form stuff on Thursdays go join the Facebook group and get access to all the free content and free goodies that I give you down below all the templates and things make sure you go grab all of that stuff as well I love helping people like you make that progress towards um launching their Assisted Living business does residential Assisted Living sound interesting to you but you don't know how to get started at Assisted Living investing. net we're here to help people help beginners like you launch their
00:15:42
Assisted Living business in the next 12 months I want to thank you for watching thanks for being here and remind you again that it doesn't take a lot just a little bit keep going step by step by step and I promise you that if you do and you're consistent and persistent you're going to be successful thanks for watching and have a great day [Music]
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