The number of people living well into their 80s is expected to double within a generation. Demand for nursing and care is only going to grow, creating healthy forward demand. Always an attractive proposition for entrepreneurs! And so care homes are a great proposition for new business ventures. But how do you get your financing sorted?
As we’ve said before in our previous articles on raising finance, it isn’t easy getting your business the right finance. In certain sectors it is even more complicated, and this is certainly true in the care sector! Deals to finance care homes are not ‘ordinary’ business or property financing. But, what do lenders look for when considering your application and, most importantly, what can you do to give yourself the best chance of succeeding?
Well, the first port of call for any lender when being sent a care home finance application is to look for any previous sector experience. Have you worked in the sector before? If not, you may need to ensure that you are well appraised of just what is expected of you, the property and the business.
So, if you don’t have prior experience in the sector, you could look to maintain the current management team to ensure that your application and subsequent handover is as easy as possible. Alternatively, you might look to line up a suitable management team to install to assist you with the regulatory aspect of the deal and subsequent running of the business.
The big thing to consider is the standing of the home with the Care Quality Commission (CQC). They monitor all care homes operating in the country, and lenders will consider their latest report in their assessment. If the business being sold is not up to scratch, you may need turnaround plans in situ to detail how you expect the business to recover, in terms of lost revenue, any property concerns and potential accreditation issues with the CQC.
And all this comes before you get your final CQC approval to allow for completion of your financing. As we said, it’s not an easy process, but the opportunities in the sector can make it a lucrative one. You may think that getting business finance is easy, but it really can be a hassle. You probably should use a broker who can relieve this, knows the sector, and can work alongside you to help get you to completion.
Daltons have all the advice you need in our Buyer’s guides. See nursing and care homes for sale here.
ABOUT THE AUTHOR
Joshua Ejdelbaum – ASC Finance for Business
ASC Finance for Business is Commercial Finance Brokers with almost 50 years’ of getting small businesses the right finance. If you would like to speak to ASC about raising finance for your care home acquisition or refinancing, click here: www.asc.co.uk/yourlocaloffice
