You just need to keep an investor under 20% ownership otherwise they would also have to guarantee the loan.
Investors – the SBA allows you have “investors” who invest their cash in the business in exchange for an ownership percentage in business. 401k from a former employer (this can also be done tax and penalty free). There are many potential sources of funds for a down payment loan, but most often we see borrowers tapping home equity in a primary residence or an investment property to do this, especially in areas where property values have increased dramatically, like California. Loans – as long as you have another source of stable income from another business, another job or a spouse with income, you are allowed to borrow all or part of the down payment per SBA rule. The down payment can come from the following sources when purchasing either the business or the business and the home/building: Care Home Mortgage Down Payment OptionsĬommercial mortgages for care homes through an SBA lender allow for a lot of flexibility with regard to the source of down payment and there are numerous ways you can come up with the 10% required for a business acquisition. *maximum loan amount for 100% financing for almost all transactions will be $5 million, but exceptionally strong borrowers/strong transactions can get 100% financing above $5 million. it would be difficult to get 100% if you recently purchased a residential care home business and were looking to expand, but once you have owned the business long enough to prove that it can do well under your managment/ownership then you should be eligible to purchase another with no down payment. A long enough period of ownership for any existing facilities. It is possible to purchase an underperforming facility/home that doesn’t quite have strong enough cash flow as long as you can provide a solid plan to do so AND have the right experience to get a lender comfortable with your plan and your projections. Solid, consistent cash flow for your exisiting facilities/home(s) and solid consistent cash flow for the facility you are purchasing. The keys to qualifying for SBA loans for assisted living are as follows: ADULT FAMILY HOME BUSINESS CARD LOGOS HOW TO
If you are trying to figure out how to get funding to buy a care home and you are expanding an existing assisted living facility or residential care home business then 100% financing is available via the SBA. Assisted Living Facility Financing – 100% The key to qualifying for SBA financing for a residential care home, adult foster care home or a group home is that you must provide some minimal amount of “healthcare or medical services,” and it can be very minimal.
They are also popular in Arizona, Texas, Washington, Oregon as well as many other states. In Florida they are known as Adult Family Care Homes (AFCH’s) and in California they are commonly referred to as Residential Care Facilities for the Elderly or RCFE’s. Residential assisted living homes – aka Board and Care homes, Adult Care Homes, Adult Foster Homes or Personal Care Homes – have become very popular across the U.S. Care home mortgages are readily available from some SBA lenders for these types of businesses/properties.įinancing for residential assisted living facilities is possible with no down payment if you already own at least 1 successful residential assisted living facility or with just 10% down if you are purchasing your first care home… or 5% down if you have a seller willing to hold a 2nd mortgage on “standby.”Īlso, if the building or home is the larger percentage of the purchase price then care home mortgages are available with a 25 year term and amortization.
If you are buying a care home business – where you finance both the business and the home – you may find that your financing options are limited unless you consider an SBA loan for assisted living.
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