Financial solutions for first time buyers in the care sector
Designed For Your Business
- Payments geared to your turnover
- Adverse Credit – no problem
- No Income Proof Required
- Repayment and interest-only available
Finance For Property
- Terms up to 20 years
- £50,000 – No Maximum
- Rates from 2% over base rate
- Up to 80% Loan to Value available
- Answers for all types of challenges
- Solutions tailored to your needs
- Arrangements tailored to your circumstances
- Assets, cashflow, growth capital
Increasing life expectancy means that there is a growing need for residential accommodation for people who are old, vulnerable or for many other reasons need help with living. It provides opportunities for new businesses
Old peoples homes, nursing homes and sheltered accommodation, children’s homes and other residential facilities are an important provision for the car sector.
According to the Office for National Statistics (ONS), demand will increase. It means plenty of opportunity for setting up a specialist residential home as a rewarding.
But of course running a care home is not simply a business. Looking after vulnerable people and those at the end of their lives is a huge responsibility.
Compassion, a professional caring approach and a genuine desire to enhance the lives of residents are all essential, as it a commitment to meet extensive and demanding regulations.
You and your business will also need to register and be assessed and approved by:
- The Care Quality Commission (CQC) if you’re based in England
- The Care Inspectorate if you’re based in Scotland
- The CSSIW if you’re based in Wales
The CQC has detailed regulations for home owners including the need to employ suitably qualified and competent staff and the need for the premises to meet stringent health and safety standards, as well as requirements for the safeguarding and treatment of residents. It inspects homes at regular intervals and they may be put into special measures, or even struck off the register, if they fail to meet the necessary standards.
Meeting standards is essential and makes good business sense. The best solution to build a profitable business is to provide a high standard of care - which will help ensure full occupancy, and hence maximise profits.
But the biggest barrier to setting up a care home will be cost. The cost of buying suitable premises, equipping them and bringing in staff may be substantial.
At Rangewell we work with care homes across the UK. It means we know the challenges you face at all stages of setting up and running your home - and we know the financial solutions to them
Your care home funding needs
As a care home operator, you may need to find the right type of funding to help you when you are ready to:
- Set up a new care home
- Buy an existing care home
- Acquire equipment and assets
- Provide working capital
- Support your cashflow
- Finance growth
- Deal with tax
Buying property to set up a new care home
Starting a care home business may be an expensive venture. Unless you already have suitable property your first need will be premises.
A very large residential house orl premises in use as an HMO many be suitable, or you may find a redundant hotel which has the necessary space, rooms and and communal areas.
The location can be crucial. A town may be more practical than a country location Size is also important. For a care home to be profitable you will need to be able to provide care for a minimum of 25 clients.Remember, you will almost certainly need change of use planning permission provided by the local authority if you want to turn a private residence into a care home.
A residential mortgage is not suitable for buying business premises, and a commercial mortgage will be required. These are designed for business premises, and can can help your potential care business spread the cost of acquiring a suitable property over 20 years or more. With property being seen positively by most lenders, it may be relatively easy to secure a commercial mortgage although as a new business you should still expect to provide a detailed business plan which will show how your business can generate sufficient profits to repay the loan.
Interest rates may be a little higher than residential mortgages, and there may also be arrangement fees.
At Rangewell we can help you with the application, find the mortgage providers who are most likely to be receptive to your business plans - and work with you to find the most cost-effective deal .
Buy an existing care home
An alternative is to buy an existing home.
This has an important advantage in that it will come ready to generate revenue from day one, providing a shortcut into profits.You may also find that it reduces the cost of borrowing - lenders are usually happier lending to an established business which can demonstrate viability with positive accounts from previous years. We can help you secure solutions to let you buy into an established care home.
Funding equipment for your care home
If you are setting up a care home will have a wide range of equipment needs. If you plan on provide nursing care, you will be faced with a long list of medical equipment, from beds and wheelchairs to hoists, to provide medical beds, wheelchairs and hoists. You may need to fit out a kitchen capable of producing large numbers of meals, as well as business items such as a computer and printer.
Asset finance lets you spread the cost of the equipment - or assets - you need. There are two key types of asset finance:
Hire Purchase allows you to spread the cost of items such as seating and tables that you expect to give long service for the long term. HP agreements generally last between 12 and 72 months and require a 10-20% deposit plus fixed monthly instalments.
Leasing operates like a rental agreement. You pay a monthly charge to use the asset. You might choose to lease your IT equipment, which can provide the extra peace of mind that comes from knowing if something goes wrong, the lease company can be responsible for dealing with it.
Find out more about the asset funding solution for your care home <link>.
Cashflow finance for care homes
Cashflow is a challenge for any business. If you are faced with a large number of large costs simultaneously, your could find that your cashflow has become negative - that you business is losing money
Cashflow support and working capital finance can provide cash to deal with overheads, and keep your cashflow positive. It is usually designed to be repaid in the short- to medium-term, once the your business becomes profitable. Find out more about cashflow finance for care homes.
Your new business will require insurance protection. As a minimum you will need need to arrange:
- Employers’ liability insurance - to cover claims from staff who are injured or harmed at work. Lifting elderly patients is a serious risk for carers, and can result in back injuries which may be judged to be the responsibility of your agency
- Public liability insurance - to cover claims made by clients and their families for injury or damage.
- Professional indemnity insurance - to protect your business if you make decisions that result in loss damage or harm
- Medical malpractice cover -and treatments liability insurance - to deal with issues relating to giving medication
You may be able to find an insurance package specifically tailored for your agency which combines all these types of cover from a broker familiar with the sector. The premium is still likely to be high - at Rangewell, we can find solutions which will let you spread the cost of the cover you need.
Tax loans for care agencies
Running a business wil mean tax, and a large quarterly VAT or annual tax demand can cause problems with cashflow. Tax loans help you spread the cost of your tax demands into affordable monthly payments. They mean that you care home business can have:
- Better control of cash flow
- Fixed monthly payments
- Quick and simple to arrange
It can also ensure that you avoids larte payment issues with HMRC, with the potential penalties and reputational damage that can follow
See how a Tax Loan can mean better control of cashflow.
Dealing with problems
Any business can face operational and financial challenges. At Rangewell, we know the solutions which can help your care home business deal with them. We can even help find financial solutions if you have a damaged credit history or CCjs, which are considered red flags by most lenders.
Find out more about finance for care homes facing financial difficulties.
How we help you capitalise your care home
Your new care home business may present a number of funding needs. At Rangewell, we aim to provide an individual approach and the solutions you need. We use our expertise to find the most competitive deal for all types of finance, including Professional Loans, Unsecured and Secured Loans. We can help tailor cover for your plans
Call us now to get our care home funding experts working for you.
Download Rangewell’s free and detailed guide to Finance for your Care Home
What types of finance are available to Care Homes and business providing residential care?
What is Asset Finance - and how it gives you a business advantage
Can finance help me increase the number of care home places my property offers?
Why not all providers are equal - finding the one that’s right for you
How we can help you pay less than 0%
The downsides to finance - and how to avoid them
How to arrange finance - What paperwork do you need?
What type of information will I need to provide with an application (eg, company numbers, registered office details, VAT numbers, accounts)?
Are all lenders authorised and regulated by the Financial Conduct Authority?
How do I go about arranging Care Home finance?
Key terms explained
More information available in our care ecosystem for businesses in the care and support sector/care model
Getting the right funding arrangement is essentialThere are many forms of business finance available. Getting the most appropriate type for your particular needs is essential to avoid excessive costs.
Your key equipment could be at riskIf you are unable to keep up repayments on a hire purchase or lease agreement, the equipment your practice depends on could be could be at risk.
Long-term financial commitmentsYou may not be able to pull out of a finance arrangement once set up. This could present a problem if you change your business plans.
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