Assisted living feels like home with help from SBA 504 loan

Barbara Morrison
Barbara Morrison

I’d like to share a case study to talk about SBA 504 commercial real estate financing.

My company, TMC Financing, recently helped Dean & Grey Care Services co-owners Karl Ramos and Ana Espinoza secure $1.6 million in SBA 504 commercial real estate financing. The funds were used to purchase a 12-resident assisted living facility in Carmichael, CA. With just 15% down, Ramos and Espinoza obtained this property at a below-market, fixed rate for 25 years. Through this acquisition, these small business owners will work to establish personalized, high-quality long-term care for their residents.

Right combination of family and experience

The Dean & Grey team has the well-balanced experience to successfully run the newly acquired care facility. Espinoza and Debbie Ramos (Karl’s wife) both are registered nurses with decades of hands-on experience. Through his senior management position with the Sacramento Municipal Utility District, Karl also has more than 10 years of experience managing business operations and budgets.

Together, they oversee the day-to-day operations of Dean & Grey (technically, Dean Estate and Grey Manor — and a take on the middle names of Karl and Debbie’s sons).

The leadership team works with its dedicated staff to meet residents’ needs, including assistance with dining, dressing and bathing. In addition, they bring in musicians, artists and others to provide enhanced programs that bring joy to each day, such as concerts and flower-arranging workshops.

Rates are fixed

The facility’s previous owners recognized the high-quality care that Espinoza and Ramos could offer to the residents. As they negotiated sale terms, Ramos explored funding options. That is when he discovered the SBA 504 loan.

“When we first looked at financing options, the SBA 7(a) was a program that we considered,” Ramos explains, “but when we looked closely at the terms of the SBA 504 loan program, it was clear that this was the best option for our project.”

The SBA 504 loan program offers lower down payments than conventional commercial real estate loans, as well as fixed interest rates for the life of the loan and longer amortizations — typically 25 years — which means lower monthly payments.

Down payment is small

Ramos connected with TMC Financing’s vice president of business development, Arlene Villarin. who worked diligently to facilitate the project.

“Special purpose projects, like assisted living facilities, often require very large down payments, sometimes as high as 40%,” Villarin says. “For Dean & Grey, the 504 loan was the best financing option because the down payment requirement was only 15%. For many small business owners, this is the difference that makes the dream a reality.”

The deal closed on May 6, and the ownership change is undergoing a smooth transition.

Small business dreams can come true

Karl offers insight to other business owners, saying, “When exploring loan options, you can spend a lot of time shopping for lenders, but the value of great customer service is something that all entrepreneurs should prioritize.”

An SBA commercial real estate financing provider can guide you through the process, from pre-qualification through the duration of your loan, and be your advocate every step of the way.

Barbara Morrison, a California business and civic leader, is the founder and president of TMC Financing, a certified development company that provides SBA commercial real estate financing. A former mayor and city council member for the city of Belvedere, CA, Morrison advocates for women and small business owners and has provided leadership for many community organizations.

The opinions expressed in each McKnight’s Senior Living marketplace column are those of the author and are not necessarily those of McKnight’s Senior Living.

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