SBA Loans for Assisted Living Facilities in Mississippi

The Small Business Administration offers powerful financing programs for assisted living facility owners and developers in Mississippi. SBA 504 and 7(a) loans provide favorable terms, lower down payments, and competitive rates that make Personal Care Home ownership more accessible.

SBA Loan Programs Overview

SBA 504 Loan Program

The 504 program is ideal for real estate acquisition and construction:

Program Structure:

• 50% from conventional lender (first lien)
• 40% from CDC/SBA (second lien)
• 10% borrower equity (down payment)

Key Benefits:

• Below-market fixed rates on SBA portion
• Long terms (20-25 years)
• Lower down payment than conventional
• No balloon payments
• Predictable monthly payments

Maximum Loan Amounts:

• Standard: $5 million (SBA portion)
• Manufacturing/Energy: $5.5 million
• Total project: Up to $12.5 million

SBA 7(a) Loan Program

Flexible financing for various business needs:

Loan Features:

• Up to $5 million
• Terms up to 25 years (real estate)
• Working capital included
• Equipment financing
• Business acquisition

Interest Rates:

• Variable: Prime + 2.25% to 2.75%
• Fixed rate options available
• Rate based on loan size and term

Uses of Funds:

• Property acquisition
• Construction/renovation
• Equipment purchase
• Working capital
• Debt refinancing
• Business acquisition

Eligibility Requirements

Business Qualifications

SBA Size Standards:

• Annual revenue under $8.5 million, OR
• Fewer than 500 employees
• For-profit business
• Operating in the United States

Mississippi-Specific:

• Licensed by MSDH
• Compliant with state regulations
• Good standing with regulatory agencies

Owner Requirements

Personal Qualifications:

• U.S. citizen or permanent resident
• Good character (background check)
• No recent bankruptcies
• No federal debt delinquency

Financial Requirements:

• Reasonable credit history (typically 680+ FICO)
• Adequate equity injection
• Demonstrated management ability
• Relevant industry experience preferred

Property Requirements

Eligible Properties:

• Personal Care Homes
• Assisted Living Facilities
• Memory care facilities
• Senior housing with services

Property Standards:

• Owner-occupied (504 program)
• Meet building codes
• Adequate condition
• Proper zoning

Mississippi SBA Resources

Certified Development Companies (CDCs)

CDCs administer the SBA 504 program in Mississippi:

Mississippi Development Authority

• Statewide coverage
• Economic development focus
• Phone: (601) 359-3449
• Website: mississippi.org

Southern Development Council

• Regional coverage
• Healthcare experience
• Phone: (601) 981-0831

Delta Regional Authority

• Delta region focus
• Rural development
• Phone: (662) 624-8197

SBA District Office

Mississippi District Office

• Address: 210 E. Capitol Street, Suite 900, Jackson, MS 39201
• Phone: (601) 965-4378
• Services: Loan assistance, counseling, resources

Preferred Lenders

Mississippi banks with SBA Preferred Lender status:

Loan Comparison

SBA 504 vs. 7(a)

When to Choose 504

• Purchasing real estate
• New construction
• Major renovations
• Long-term ownership planned
• Want lowest fixed rate

When to Choose 7(a)

• Need working capital
• Smaller loan amounts
• Want prepayment flexibility
• Business acquisition
• Equipment-heavy projects

Application Process

Step 1: Preparation

Gather Documentation:

• Business plan
• Financial projections (3-5 years)
• Personal financial statements
• Tax returns (3 years business and personal)
• Bank statements (12 months)
• Entity documents
• Licenses and permits

Prepare Business Plan:

• Executive summary
• Market analysis
• Management team
• Operations plan
• Financial projections
• Use of funds

Step 2: Lender Selection

Finding the Right Lender:

• Research SBA-approved lenders
• Compare terms and experience
• Check healthcare lending expertise
• Evaluate responsiveness
• Consider relationship potential

Questions to Ask:

• Experience with ALF financing?
• Typical timeline?
• Required documentation?
• Fees and costs?
• Ongoing requirements?

Step 3: Application Submission

Complete Application Package:

• SBA Form 1919 (Borrower Information)
• SBA Form 1920 (Lender's Application)
• Business financial statements
• Personal financial statements
• Tax returns
• Business plan
• Property information

Step 4: Underwriting

Lender Review:

• Credit analysis
• Cash flow verification
• Collateral evaluation
• Management assessment
• Industry analysis

SBA Review (if required):

• Eligibility confirmation
• Credit decision
• Loan authorization

Step 5: Closing

Pre-Closing:

• Title work
• Appraisal
• Environmental review
• Insurance requirements
• Legal documentation

Closing:

• Document execution
• Funds disbursement
• Recording of liens
• Ongoing compliance setup

Costs and Fees

SBA 504 Costs

SBA 7(a) Costs

Third-Party Costs

• Appraisal: $4,000-$10,000
• Environmental: $2,000-$4,000
• Legal fees: $4,000-$12,000
• Title insurance: Varies
• Survey: $2,000-$4,000

Interest Rates

Current SBA Rates (2026)

SBA 504 Rates:

• 20-year debenture: 5.50%-6.25%
• 25-year debenture: 5.75%-6.50%
• Rates set monthly
• Fixed for loan term

SBA 7(a) Rates:

• Variable: Prime + 2.25% to 2.75%
• Current range: 7.50%-9.00%
• Fixed options: +0.50% to 1.00%

Rate Factors

Loan Size:

• Larger loans = lower spreads
• Under $50K: Prime + 2.75%
• $50K-$250K: Prime + 2.50%
• Over $250K: Prime + 2.25%

Term Length:

• Longer terms may have higher rates
• Fixed rates premium over variable

Mississippi ALF Financing Examples

Example 1: New Construction

Project:

• 48-bed Personal Care Home in Jackson area
• Total cost: $7.2 million

SBA 504 Structure:

Monthly Payment: $44,500 Blended Rate: 6.44%

Example 2: Acquisition

Project:

• 38-bed existing facility in Hattiesburg
• Purchase price: $3.4 million

SBA 7(a) Structure:

Example 3: Refinance with Expansion

Project:

• Existing 42-bed facility
• Current debt: $2.4 million
• Expansion: 10 beds
• Total project: $4.2 million

SBA 504 Structure:

Tips for Success

Strengthen Your Application

1. Solid business plan - Detailed and realistic
2. Strong financials - Clean, organized records
3. Industry experience - Highlight relevant background
4. Adequate equity - More than minimum if possible
5. Good credit - Address issues proactively

Common Mistakes to Avoid

1. Incomplete applications - Delays processing
2. Unrealistic projections - Undermines credibility
3. Poor documentation - Raises red flags
4. Ignoring credit issues - Address upfront
5. Wrong program choice - Match needs to program

Working with Lenders

1. Be responsive - Quick turnaround on requests
2. Be transparent - Disclose issues early
3. Be organized - Professional presentation
4. Be patient - Process takes time
5. Be prepared - Anticipate questions

Post-Closing Requirements

Ongoing Compliance

Reporting Requirements:

• Annual financial statements
• Tax returns
• Insurance certificates
• Occupancy reports

Operational Requirements:

• Maintain licenses
• Meet job creation goals (504)
• Owner-occupancy (504)
• Proper use of funds

Loan Servicing

Payment Management:

• Automatic payments recommended
• On-time payment history
• Communication with lender
• Address issues promptly

Additional Resources

SBA Resources

• SBA.gov - Official program information
• SCORE - Free business mentoring
• SBDC - Small Business Development Centers
• Women's Business Centers - Specialized assistance

Mississippi Resources

• Mississippi Development Authority
• Mississippi Small Business Development Center
• Innovate Mississippi
• Local chambers of commerce

Next Steps

Ready to explore SBA financing for your Mississippi assisted living facility? Our team specializes in SBA loans for senior care facilities throughout the Magnolia State.

Get Started:

1. Apply for SBA Financing
2. Explore HUD Loan Options
3. Review Construction Loans
4. Check Market Trends

Contact us today for a free consultation and discover which SBA program best fits your Mississippi ALF project.