Rangewell

Helping Children’s Care Home Group Borrow £7m To Fund Growth

By Rose Brown
Content writer
Published: 14 May 20241 minute read
Helping Children’s Care Home Group Borrow £7m To Fund Growth

Securing lender investment based on genuine business value

For many care groups, the value of the business outweighs the value of any owned property. Unfortunately, lenders are typically only willing to lend against brick-and-mortar value – unless you have Rangewell’s support…

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For businesses that own multiple properties across various sites, such as healthcare and care home groups, raising finance can be a struggle because lenders often only lend against the value of the property – even if your business is worth far more. 

We recently worked with an ambitious care home group that wanted to expand their group portfolio, leveraging the full value of their business was absolutely essential to getting the finance they needed. Recognising a need for an expert partner to help assist them with the process, they turned to Rangewell for help. 

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Why was there a problem?

Whilst the care group itself had achieved impressive growth and had evidence of strong EBITDA, mainstream lenders such as high street banks were only willing to lend against the value of the group’s care properties. 

Though property contains an intrinsic value, the organisation was clearly worth far more than the bricks and mortar cost of the property portfolio. Unfortunately, much of this value was tied up in intangible assets and projections rather than the solidity of property – which is why lenders typically only offer loans against those assets. 

This meant the group was unable to raise the sums it needed to expand at the required rate. Their existing properties were valued at around £1.5 million, which meant lenders would offer up to 90% of the freehold value for a total loan of £1.35m. The business, however, was valued at £7 million – so finding a lender that would lend against this was crucial to raising the money they needed. 


 

Why we were able to help

Rangewell has pre-existing relationships with lenders who are willing to lend against business value. After an initial consultation with the care group, we were able to suggest lenders who would lend the required amount AND had experience in the care sector, meaning we could arrange a loan more tailored to the group's specific needs. 

After discussing their plans with the lender, we were able to arrange a total facility of £4.3m that the client could use to fund their growth plans. This finance was structured as a flexible facility, enabling the client to draw on funds dynamically when it was required. 

Leverage the value of your business

If you’ve done the hard work of growing your business to a significant valuation, why accept loans for lesser values based solely on your property or assets? With Rangewell on your side, you can find a lender that will loan against EBITDA projections or other valuations. 

Fund your next care home expansion

Get loans against business value






 

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