SBA Loans for Assisted Living Facilities in Indiana

The U.S. Small Business Administration (SBA) offers powerful financing programs for assisted living facility owners and operators in Indiana. Whether you're acquiring an existing facility, building new, refinancing debt, or expanding operations, SBA loans provide competitive rates, longer terms, and lower down payments than conventional financing.

Overview of SBA Loan Programs for Indiana ALFs

SBA 7(a) Loan Program

The SBA's flagship loan program offers maximum flexibility for assisted living facilities:

Loan Details:

Maximum loan amount: $5 million
Terms: Up to 25 years for real estate, 10 years for equipment
Down payment: As low as 10%
Interest rates: Prime + 2.25% to 2.75% (variable) or fixed options

Eligible Uses:

Facility acquisition
Real estate purchase
Construction and renovation
Equipment and furniture
Working capital
Debt refinancing
Business expansion

SBA 504 Loan Program

Ideal for major real estate and equipment purchases:

Loan Structure:

50% from conventional lender (first mortgage)
40% from CDC - Certified Development Company (second mortgage)
10% borrower equity (15% for new businesses)

Key Benefits:

Below-market fixed rates on CDC portion
Up to 25-year terms
Lower monthly payments
Preserves working capital

Eligible Uses:

Land and building purchase
New construction
Major renovations
Heavy equipment

Indiana SBA Lending Resources

Indiana District SBA Office

Location: Indianapolis, IN Coverage: Entire state of Indiana Services: Loan assistance, counseling, training programs

Indiana CDCs (Certified Development Companies)

For SBA 504 loans, work with these Indiana-based CDCs:

CDC Name	Service Area	Contact
Indiana Statewide CDC	Statewide	Indianapolis
Regional Growth CDC	Central Indiana	Indianapolis
Hoosier Business Investment Corp	Statewide	Indianapolis
Community Investment Fund of Indiana	Statewide	Indianapolis

SBA Preferred Lenders in Indiana

These banks have delegated authority for faster SBA loan processing:

Major Banks:

First Merchants Bank
Old National Bank
Centier Bank
German American Bank
Lake City Bank
Horizon Bank
First Internet Bank

Regional/Community Banks:

Peoples Bank Indiana
First Bank Richmond
Union Federal Bank
Mutual Savings Bank

SBA 7(a) Loan Details for Indiana ALFs

Eligibility Requirements

Business Requirements:

For-profit business
Operate in the United States
Meet SBA size standards (under $8.5M annual revenue for ALFs)
Owner-occupied real estate (51%+ for existing, 60%+ for new construction)
Demonstrate ability to repay

Owner Requirements:

U.S. citizen or legal permanent resident
Good personal credit (typically 680+ FICO)
Relevant industry experience preferred
No recent bankruptcies or defaults
Background check clearance

Indiana-Specific Considerations

ISDH Licensing:

Must have or be able to obtain residential care facility license
Lenders verify licensing status
Survey history reviewed

Market Analysis:

Indiana market demographics evaluated
Local competition assessed
Occupancy projections required

Current SBA 7(a) Rates (2026)

Loan Amount	Variable Rate	Fixed Rate Option
Up to $150,000	Prime + 2.75%	Available
$150,001 - $700,000	Prime + 2.25%	Available
Over $700,000	Prime + 2.00%	Available

Prime rate as of January 2026: 7.50%

SBA 7(a) Fees

Fee Type	Amount
Guarantee Fee (loans >$1M)	3.5% of guaranteed portion
Guarantee Fee (loans $500K-$1M)	3.0% of guaranteed portion
Guarantee Fee (loans <$500K)	2.0% of guaranteed portion
Annual Service Fee	0.55% of outstanding balance

SBA 504 Loan Details for Indiana ALFs

Program Structure

Example: $2,000,000 Project

Source	Percentage	Amount	Terms
Bank First Mortgage	50%	$1,000,000	Market rate, 10-25 years
CDC Second Mortgage	40%	$800,000	Fixed rate, 20-25 years
Borrower Equity	10%	$200,000	Cash or equity

504 Loan Benefits

Fixed Interest Rates:

CDC portion locked at funding
Protection from rate increases
Predictable payments for budgeting

Lower Down Payment:

10% for established businesses
15% for new businesses or special use properties
Preserves cash for operations

Job Creation Focus:

Must create or retain jobs
One job per $75,000 of CDC financing
Community development goals

Current SBA 504 Rates (2026)

Term	Effective Rate*
10-year	5.25%
20-year	5.50%
25-year	5.65%

Rates as of January 2026, subject to change monthly

Application Process for Indiana ALF Owners

Step 1: Preparation

Gather Documentation:

Business plan with financial projections
3 years business tax returns
3 years personal tax returns
Personal financial statement
Current profit & loss and balance sheet
ISDH license (or application status)
Purchase agreement (for acquisitions)
Construction plans and budget (for new builds)

Step 2: Lender Selection

Choose the Right Lender:

Experience with healthcare/ALF lending
SBA Preferred Lender status
Competitive rates and fees
Local market knowledge
Responsive communication

Step 3: Application Submission

Complete SBA Forms:

SBA Form 1919 (Borrower Information)
SBA Form 1920 (Lender's Application)
SBA Form 912 (Personal History Statement)
SBA Form 413 (Personal Financial Statement)

Step 4: Underwriting

Lender Review:

Credit analysis
Cash flow evaluation
Collateral assessment
Industry risk analysis
Management experience review

Timeline:

Preferred Lenders: 2-4 weeks
Standard Processing: 4-8 weeks

Step 5: Closing

Final Steps:

Loan document preparation
Title and insurance verification
Closing coordination
Fund disbursement

Indiana ALF SBA Loan Scenarios

Scenario 1: Facility Acquisition

Situation: Purchasing existing 45-bed ALF in Fort Wayne

Detail	Amount
Purchase Price	$3,200,000
SBA 7(a) Loan	$2,880,000 (90% LTV)
Down Payment	$320,000 (10%)
Interest Rate	7.75% (variable)
Term	25 years
Monthly Payment	$21,850

Scenario 2: New Construction

Situation: Building 60-bed facility in Indianapolis suburb

Detail	Amount
Total Project Cost	$4,500,000
SBA 504 Structure
- Bank First Mortgage	$2,250,000 (50%)
- CDC Second Mortgage	$1,800,000 (40%)
- Borrower Equity	$450,000 (10%)
Blended Rate	~6.25%
Term	25 years

Scenario 3: Refinance and Expansion

Situation: Refinancing existing debt and adding memory care wing

Detail	Amount
Current Debt Payoff	$1,800,000
Expansion Costs	$1,200,000
Total SBA 7(a) Loan	$3,000,000
Cash Out	$0
Interest Rate	7.50% (variable)
Term	25 years
Monthly Payment	$22,200

Tips for SBA Loan Approval in Indiana

Strengthen Your Application

Demonstrate Industry Experience
- Healthcare management background
- ALF operations experience
- Relevant certifications and training
Show Strong Financials
- Healthy debt service coverage ratio (1.25x+)
- Adequate working capital
- Clean credit history
Prepare Thorough Business Plan
- Market analysis for Indiana location
- Competitive positioning
- Realistic financial projections
- Management team qualifications
Address Regulatory Compliance
- ISDH licensing pathway clear
- No outstanding violations
- Compliance history documented

Common Reasons for Denial

Insufficient collateral
Weak credit history
Inadequate cash flow projections
Lack of industry experience
Incomplete documentation
Regulatory concerns

How to Overcome Challenges

Limited Experience:

Partner with experienced operator
Hire experienced administrator
Engage ALF consultant

Credit Issues:

Provide explanation letters
Show improvement trend
Consider co-borrower

Collateral Shortfall:

Additional real estate collateral
SBA guarantee helps bridge gap
Consider 504 structure

Ready to Apply for an SBA Loan in Indiana?

**Get Expert SBA Loan Guidance**

Our team specializes in SBA financing for assisted living facilities throughout Indiana. We can help you:

Determine the best SBA program for your needs
Prepare a strong loan application
Connect with experienced SBA lenders
Navigate the approval process

Start Your Indiana SBA Loan Application

This guide is for informational purposes only and does not constitute financial advice. SBA loan terms, rates, and requirements are subject to change. Consult with qualified SBA lenders and financial advisors for current program details.