Funding solutions for your addiction services business

According to the European monitoring centre for drugs and drug addiction, the UK is the drug overdose capital of Europe. Almost one in three of Europe’s overdose deaths happen in Britain.

As well as the problem of heroin and opioids, alcohol-specific deaths have risen in recent years, along with alcohol-related hospital admissions.

These figures, distressing as they are, may only be the tip of the iceberg for the misery and suffering created by addiction. Experts believe that local drug and alcohol teams are no longer getting adequate funding because of the squeeze on local authorities’ public health budgets, forcing increasing numbers of people to self-refer for treatment.

It means there is a growing need for addiction services. Private addiction centres may charge around £10,000 for three months' treatment, while local authorities are being given £16bn over the current spending period to spend on public health. It means that there is scope for dedicated and qualified practitioners to set up businesses that generate a profit as well as fulfil a clear social need.

Treating addiction may involve medical detox programmes and rehabilitation in either inpatient or outpatient facilities, followed by rehabilitation and aftercare. Rehabilitation is designed to tackle the emotional issues relating to the illness and includes identifying the root causes of the addiction as well as providing support to avoid a relapse.

Addictions include:

• Alcohol
• Amphetamines
• Benzodiazepines
• Cannabis 
• Cocaine
• Codeine
• Eating disorders
• Gambling and gaming
• Heroin addiction
• Inhalant addiction
• Internet addiction
• Prescription drug addiction

The costs of setting up a business may be high, requiring expert teams of psychiatrists, psychologists, therapists, nurses and other highly trained mental health and addiction professionals. All treatment must be individually tailored to the client’s personal needs and requirements. Providing residential facilities may be necessary, taking costs to a new level.

However, there are ways to provide for these costs, and to support your addiction service business.

The funding you need for your addiction services business

The first step in securing the funding you need is simply to understand the different types of finance available.

They include:

• Setting up a new addiction services business
• Buying into an existing addiction services business
• Acquiring premises for your addiction services business
• Acquiring equipment and assets
• Providing working capital
• Cashflow Finance
• Financing growth 
• Dealing with tax
• Dealing with problems

Setting up a new addiction services business

Setting up a new addiction service is often done in conjunction with an existing clinic or private hospital practice, because of the costs involved.

Providing residential clinical facilities and bringing in skilled professionals with knowledge of the treatment protocols is a major investment, and may require funding of several hundreds of thousands of pounds.

At Rangewell, we understand the challenges - and know the lenders who can support new initiatives in the clinical sector. Find out more about new business funding for rehabilitation businesses.

Buying into an existing addiction service

An alternative to starting out with an entirely new venture may be to buy into an existing addiction clinic or service as a partner, or even buy it outright. The costs involved may depend on the turnover of the practice as it stands, its size, the number of specialist staff who are involved, and its potential for the future.

We can help you secure a number of solutions to let you fund acquisitions, mergers or expansion. The funding required may be substantial, but can reflect your professional status with highly competitive rates.

These include funding for Partner Buy-ins and Buy-outs, which will let you become a partner or acquire an entire practice, and business acquisition funding, which often takes to the form of a secured loan, with security provided by an existing business or your home.

We can also provide solutions to let you selectively acquire assets - such as the goodwill and client list - from an existing service.

Funding premises for addiction services businesses

Premises represent a major investment for any business, but the costs of acquiring or creating residential clinical premises are particularly daunting.

It may be possible to lease suitable premises, but buying with the help of a Commercial Mortgage could actually decrease your monthly outgoings and provide a valuable asset for the future of your business. All Commercial Property Finance is arranged on an individual basis - but we can help provide solutions which will let you buy the premises you already operate from or buy a new freehold property.

Buying premises may be a sound decision, but you may need to make an additional investment to bring premises up to the standard you require, or to install medical facilities

We can help find funding for refurbishments from light decoration to major extensions and building work.

Funding for equipment

Your service will need equipment. You will need beds and monitors, and you may want equipment for physical therapy, seating for dayrooms, as well as an IT set-up, with computers and printers.

Asset Funding may provide the most cost-effective solution for most equipment, and there are several types of Asset Funding to consider. You may prefer Hire Purchase for items that you will wish to keep, such as desks, chairs and document storage - you simply spread the cost of buying over up to 5 years

Leasing may be more appropriate for items such as your IT equipment, as it will allow you to update to use the latest and most reliable technology whenever you need it. Contract Hire might help you reduce the costs of providing vehicles.

At Rangewell, our experts can help you find the most appropriate Asset Funding solutions for your addiction service, with both HP and lease agreements.

We also have specialised funding for your IT equipment 

Cashflow Finance for your addiction service 

Cashflow is a challenge for any enterprise, and especially during the early stages, while you are establishing your service.

Cashflow support and Working Capital Finance can help deal with large costs and overheads, and keep your cash flow positive. It is usually designed to be repaid in the short- to medium-term, once the cashflow shortfall itself has been dealt with, and you have the number of clients you need to become profitable.

If you have local authority payments as part of your income stream, you may face problems with slow payments. Invoice Finance - which will allow a lender to make a cash advance as soon as you issue an invoice for services completed - could provide a cash flow lifeline in these cases.

Find out more about Cashflow Finance solutions for addiction care agencies. 

Insurance cover for your addiction services business

You and your staff will be directly responsible for the welfare of your clients, and making decisions on therapy which may well be crucial to their futures. It means that your business must have insurance cover against a number of potential liabilities and legal claims.

As a minimum you will need need to have:

• Employers’ liability insurance - to protect your business against claims from staff who are injured or harmed at work. Lifting elderly or immobile patients is a serious risk for carers, and can result in back injuries which may be judged to be your responsibility
• Public liability insurance - to deal with claims made by clients and their families for injury or damage 
• Professional indemnity insurance - to protect your business if your staff make decisions that result in loss, damage or harm
• Medical malpractice cover - and treatments liability insurance - to deal with all issues relating to giving medication, treatment and aftercare

Rather than buying these covers separately, you may be able to find an insurance package specifically tailored for your business from a broker familiar with clinical practices. 

At Rangewell, we can find solutions which will let you spread the cost of the cover you need.

Tax Loans for your addiction services business

Tax is inevitable for any business. Large, quarterly VAT liability and annual tax demands can cause real problems with cash flow.

Tax Loans can help you spread the cost of any tax demands into affordable monthly payments. 

• Fixed monthly payments
• Quick and simple to arrange
• Avoids issues with HMRC, potential penalties and professional liabilities

See how a Tax Loan can mean better control of cash flow with fixed monthly payments.

Dealing with business problems

Even the best-run business can run into financial difficulties the loss of clients or a local authority contract could mean money stops coming in. Problems with getting paid can become a cashflow crisis, and discovering that you cannot meet your immediate commitments could lead to insolvency.

At Rangewell, we know the solutions. We can even provide funding solutions if you have a damaged credit history or CCjs.

Find out more about finance for addiction service businesses facing financial difficulties.

How we help you capitalise your addiction services business

Getting the most appropriate solution for your funding needs takes a thorough understanding of both of the lending market, and the products available on it.

At Rangewell have the expertise you need. We know the lenders who can offer the most competitive rates for the sector for all types of finance, including Professional Loans, Unsecured and Secured Loans. As well as conventional loan products, we can also help you find Alternative Funding, using new loan providers and innovative funding solutions.

So whether you have a straightforward finance need, or you require something more complicated like ‘Jigsaw’ Funding made up of a combination of products, we can work with you to find the answers that are right for you, your rehabilitation business and your plans for the future.