{"id":1004134187,"date":"2016-01-06T12:41:06","date_gmt":"2016-01-06T20:41:06","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004134187"},"modified":"2022-12-08T00:16:37","modified_gmt":"2022-12-08T08:16:37","slug":"finance-column-a-new-avenue-for-sba-504-lending","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/finance-column-a-new-avenue-for-sba-504-lending\/","title":{"rendered":"Finance Column: A New Avenue for SBA 504 Lending"},"content":{"rendered":"

By Rich Grant, Executive Vice President, TMC Financing<\/em><\/p>\n

\"TMC-Rich-Grant\"<\/a>The country’s aging population, increased consumer demands and advances in medical care are driving current trends in suburban medical space development. As a result, we\u2019re seeing an increase in SBA 504 lending for assisted living facilities and owner-occupied medical facilities and there are some common trends emerging.<\/p>\n

In the past 12 months, we\u2019ve had more assisted living loans authorized\u2014for projects totaling nearly $27 million\u2014than we\u2019ve seen in the previous\u00a0three years combined. One of the reasons for this increase is that, with many banks not eager to lend to special-purpose properties like residential care facilities, using an SBA 504 partner allows for the risk to be shared and a separate underwriting team to look at the viability of the project. If an assisted living facility loan has to be foreclosed on, residents have to be relocated, which is tough for all parties. For this type of special-purpose property, the typical SBA 504 structure is at least 15 percent down from the operating company, as much as\u00a035 percent from the SBA 504-certified development company and as much as\u00a050 percent from the conventional lender.<\/p>\n

At TMC, half of our recent assisted living projects are new construction, and the facilities are geared to meet consumer demand and create an integrated community with higher-end, value-added amenities\u2014a lot like boutique hotels. Some of our clients are even hoteliers that\u00a0have partnered with doctors or nurses to create a new facility. Many of our SBA borrowers also own more than one facility. As with\u00a0hotels, there are economies of scale with multiple properties and in turning around non-performing assets.<\/p>\n

Other trends we\u2019re seeing among\u00a0these assisted living projects include:<\/p>\n