Financial solutions for supported living

Supported living allows someone to have support from a “Care and Support” provider to help them live as independently and safely as possible.

Supported housing may be provided as rooms in a group home or as individual flats for tenants with learning difficulties or medical problems, and who have their rent paid for by the local authority. In some cases, people with basic needs can live relatively independently. Others, with profound or multiple complex needs can benefit from a supported living environment, with care staff providing 24-hour support.

The staffing is dependent on the needs of the people who live there and could be 24 hours a day or a few hours a week. It may require approval 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

At Rangewell we work with many types of businesses, including those providing supported living facilities. It means we know the challenges you face at all stages of setting up and running a home - and we know the financial solutions to them.

To understand how to get the funding you need, it helps to look at the costs you face, and to break them down into categories.

• Buying an existing supported living business
• Starting up a new supported living business
• Providing equipment
• Dealing with insurance
• Supporting your cashflow 
• Dealing with tax

Buying an existing supported living business

The shortcut into owning a successful supported living business is simply to buy one. If you can find an established supported living business for sale, with premises,staff and residents already in place buying it and becoming the manager or owner could mean that you can start enjoying an established income right away.

However, the costs may be high. the cost of property will ensure that a supported living home will be a substantial investment. What's more, the more successful any business may be, the more you will need to pay for it. If the supported living business you are looking at has a record of successful operation going back a  few years, the accounts will prove what it is capable of earning - and lenders may be able to look at the books when considering their decision.

The fact is that it can be easier for lenders to make the decision to lend to buy a successful business even if the costs are high - and at Rangewell we can help you find the lenders that can offer the deals you need, keeping costs under control.

Starting up a new supported living business

Starting up any new business can be a challenge. Banks and other lenders prefer to deal with established businesses who can demonstrate a history of profits with several years accounts. As you are starting up your business will have no trading history or accounts, which means you have no way to demonstrate that it will be able to repay a loan. Many will refuse to deal with you altogether.

Fortunately, at Rangewell, we know that there are lenders who may be willing to provide the funding you need to get your startup business off the ground.   Almost all will require security and often a personal guarantee, but it is usually possible for us to find lenders who can be sympathetic - if you have a sound business proposition demonstrate in a clear business plan. 

Find out more about lending for startup businesses

 

Breaking down the costs of starting up

If you are starting up a supported living business, or if you are looking at expanding an existing home there are a number of costs that you will need to cover. It can help to break these down into separate topics - because each type of cost may be best met with a specific type of funding. 

Getting the right type of finance for each need can substantially reduce your overall costs. Start by creating a detailed business plan, which will show your sources of income and the costs that you will need to cover. 

Dealing with the cost of property

As a supported living home provider, the first, and most daunting cost will be that of providing the property you need. 

A large older house or a small block of flats may be ideal for your business. But these types of homes may already be subject to substantial demand in many areas of the country. an investment in six figures will probably be required to purchase the property, and if may require extensive refurbishment to be suitable for assisted living accommodation.

The location can therefore be crucial. There are pressing practical considerations. Most residents will need to use public transport. So, a town centre might make it easier for residents and make it easier to find staff who will not want to travel too far to work.

Once you have found the property you want, you will probably need a mortgage. As a business, a residential mortgage will not be suitable - and in most cases even a Buy to Let mortgage will not be able to provide the funding you need, as your property will be classed as a Home In Multiple Occupation, or an HMO.

Not all lenders are keen on providing mortgages for HMOs because of what they see as an increased risk.At Rangewell, we know the specialist lenders who can offer competitive deals for landlords looking to purchase an HMO or convert an existing property, with an HMO or commercial mortgage. They may be more costly than a conventional buy to let mortgage, but can cover up to 75% loan-to-value.

With our help, finding a lender can be straightforward, although costs may be a little higher than comparable Buy to let arrangements, and you will need to provide evidence that your business will mean all the necessary legislation.

Suitable Commercial mortgages can help you spread the cost of acquiring a suitable property over 20 years or more. 

At Rangewell we can help you with the application and find the lenders who are most likely to be receptive to your business plans, and help you buy the property you want.

Insurance for your supported living home

You will require insurance cover for your premises, as you would for any property.

If you employ a support staff, even part-time you will need to arrange Employers’ liability insurance.

In addition, you may require public liability insurance - to deal with claims made by clients and their families for injury or damage. In some cases you may also need professional indemnity insurance - to protect your business if your staff made decisions that result in loss damage or harm to tenants, and medical malpractice cover to cover claims against staff failing to deliver the appropriate care.

We can find funding which will help you deal with the cost of insurance premiums.

 

Refinance your supported living business

The need for external finance does not end when your home is full. At Rangewell we can help you secure funding as your business operates  - and that can frequently involve refinance.

Refinancing is simply  the replacement of an existing debt with another under different and usually very  much better terms. A loan might be refinanced to take advantage of a better interest rate, providing a reduced monthly payment or a reduced term. So,  if you already have loans, leases or other commitments in place the chances the chances are that you could replace them and improve your financial position by refinancing.

You simply take out a new loan with a better rate, and use it to pay off your existing loan.

The chances are, if you have had your existing arrangements in place for a year or so that we can help you find a loan that works out cheaper each month - reducing your commitments and improving your cashflow.

You can find out more about refinancing here 

For large scale funding needs you may be able to refinance your premises with a Commercial Mortgage.

By remortgaging an existing property your business can receive a cash lump sum to use as you wish. So existing premises could be used to raise funds to acquire a second property, allowing you to expand the scope of your operation by bringing in new tenants.You simply make monthly mortgage repayments until the property becomes yours again - and it is usually not necessary to have paid off the initial purchase of a property to be able to use it to raise funds in this way. 

Find out more about commercial refinance here.

Why Rangewell for your financial needs?

At Rangewell, our team is made up of finance experts who specialise in various sectors Our construction team know the challenges scaffold businesses faces. Whether you have a straightforward finance need, or require a complicated ‘Jigsaw’ funding plan made up of a combination of products, we can work with you to find the answers that are right for you and your plans for the future of your business

Call us now to get our care home funding  experts working for you