Care Home Finance

Given the events of recent years, residential care homes are more important than ever, and there’s quite a lot of talk about government reforms to invest a lot more money into the system, and fund social care to a much higher degree.

When they’re well run, and the property is under occupier ownership, care homes can be lucrative and rewarding businesses. That’s not to say that they don’t come with challenges, but in a change of direction against previous trends, the appetite for investment into residential care homes has been rising steadily again.

With an aging population, the fact remains that the UK will need a continuously increasing amount of beds and space for residential care homes. It is predicted that over the next 30 to 50 years capacity may need to rise by up to 50%.

The government appear to recognise this crucial point and have been gradually revealing plans to increase funding for the sector, with plans mooted for health and social care to be merged into one department with taxes and national insurance rises contributing to better funding for places.

This means that interest in investment for care homes both new and existing has been steadily rising for a few years now, and so too has the demand for specialist care home finance.

Because we offer a wide range of finance products we’re able to give you a rundown of the features and benefits of this type of finance, and give you more information about what it involves, so we’ve put together a short guide here.

What is a commercial mortgage for Care homes?

This does more or less what it says on the tin, in that it’s a commercial mortgage designed specifically to finance care homes, and is only provided, in the main, by specialist providers.

It is no different, in principle to a mortgage on a residential property or a standard commercial property in that a lender is providing you funding to purchase a care home property and repay the principle sum over a longer term period at a lower rate of interest than you would get for short term finance.

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Residential care home financing

We offer mortgage and finance services for residential care homes, whereby the people that the home serves live on site and are effectively residents.

This can include older and younger people who require extra personal care, and their residency often includes this personal care either from private paid carers or nurses.

These homes, run well, can be profitable and we have lenders keen to offer a mortgage on this basis.

Nursing home finance

Similar in nature to a residential care home, a nursing home actually house round the clock medical assistance, either through doctors or nurses, and is, by and large, more specifically for residents with complex or acute medical needs.

We offer access to finance and a specialist mortgage to invest in this type of care home and have a range of lenders willing and able to provide you with finance for this.

Again, criteria will apply, however, this is something we can cover off with you.

Care home development finance

If you’re looking to convert an existing building into a care home, then this is certainly something we can also look to help you with, either with a mortgage or other types of finance, such as development finance or bridging finance, if that’s the right product.

Similar criteria is likely to apply, in that a business plan will be required, and the lenders will want to know what your experience is like, whether you’ve worked in this sector before, and what sort of team you’re going to be working with.

Similarly, you’ll also need to show that you’re aware of the regulatory process to be authorised, how you plan to do this, and whether you have other competitors in the area, and what you expect your occupancy rate to be like.

Again, care homes are lucrative when they’re run correctly, and so there’s plenty of appetite out there from lenders for this type of project, and they’re keen to provide a mortgage or finance for the right project.

This is something we can help you with too, so if you’re unsure what sort of content you’ll need to provide this is something we can help you with throughout the process.

Different types of care homes we can arrange funding for

Care home can be a term used to cover quite a few different definitions, so we’ll do a short breakdown for the most popular examples.

As we say, appetite for lending and finance for a care home is good in the UK right now, and we’re finding it easier to find lenders for our clients in this sector, but you’ll need to be fairly specific when it comes to writing your business plan. Here’s a few of the main definitions.

Residential care homes

A residential care home is one where your clients live on the premises due to the fact, they need extra support throughout the day and night. This is mainly for older people who require help with things such as bathing, getting around and feeding themselves, but could also be for vulnerable adults who require supervision and assistance through the day.

Nursing homes

A nursing home is similar in purpose and practice, in that the customer generally live on site, but it’s usually more for people with specific or complex medical requirements who need nurses and doctors, or qualified care staff to assist them with their medical needs.

This could still be for older people, but also includes, for example, adults with brain injuries or learning difficulties that may also need medical staff to assist them.

Retirement villages

A retirement village might also be known as sheltered accommodation, and is usually consisted of separate dwellings, almost like an apartment block or development of flats, for older people to live in independently. Usually, you’d sell the dwellings on an ownership basis, and sell the property as you would with any other house, however, the key difference is that older people in these types of developments pay a fee, or subscription, for extra support from care staff and for the upkeep of the development.

Children’s care home

A children’s care home would usually be for children of varying ages that have been taken into care by the state. They are usually vulnerable and are cared for by the local authority.

These types of care homes have care and support staff on call and on the premises at all times, caring for and helping the children, and the local authority pays a fee to the home for their care.

Speak to our commercial mortgage experts

We have a team that have lots of experience in this area and in this sector. They’re able to give you free and no obligation advice to take you through the process of applying for, and being approve for, this type of finance.

It can be a complex application process, but because we work with a wide variety of lenders and investors, we’ll be able to find you the right finance partner for your project.

We have exclusive relationships with a number of investors and finance companies that can offer you exclusive deals as one of our clients, so why not take the stress out of the process and allow us to shop the market for you and guide you through the process from start to finish.

Pick up the phone or drop us an email today.