Are you a first-time care home buyer looking for bank funding? Here’s what you need to know

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The care sector continues to present a resilient and rewarding investment opportunity, particularly for those looking to make a meaningful impact while generating long-term financial returns. If you’re considering purchasing a care home for the first time, approaching the funding landscape can feel daunting, but with the right support and preparation, securing bank finance is entirely achievable.

Why the care sector?

Before diving into the funding specifics, it is worth highlighting why care homes remain such an attractive proposition:

• An ageing population and increased life expectancy continue to drive demand for quality care facilities
• Despite funding pressures, social care remains high on the political agenda, making it a relatively stable sector
• The essential nature of care services helps insulate the sector from broader economic volatility

But, like any business venture, buying a care home, especially your first, requires careful planning, due diligence, and the right financial backing.

Understand what lenders look for

The financial market is open to lending in the care sector, but they will want assurance that your business plan is viable and that you are capable of running the operation successfully.

Key areas they typically assess include:

Experience and background

While previous experience in the care sector is advantageous, it’s not mandatory. If you're a first-time buyer without direct industry experience, demonstrating strong managerial capabilities or transferable skills from related sectors, such as healthcare, hospitality, or business management, can help build confidence with lenders.

Consider surrounding yourself with an experienced care home manager, business mentor or consultancy firm, as this can strengthen your proposition.

Business plan and financials

Your business plan should clearly outline:

• The type and size of the care home you’re looking to buy
• The purchase price and funding required
• Financial forecasting for at least the next 12 months, ideally the next three years.
• Operational plans - How you plan to maintain high standards of care and compliance

A well-researched, realistic financial forecast is essential. Lenders want to see that you understand the sector’s challenges, including staffing costs, CQC compliance, and occupancy rates.

Deposit and Funding Structure

Typically, banks require a deposit of between 30% and 35% of the total purchase price. However, this can vary depending on the specifics of the deal and your financial profile. In some cases, unsecured loans or asset finance can be used to supplement your deposit or fund refurbishments and equipment.

A specialist commercial finance broker can help you explore all available funding options and structure the deal in a way that suits your goals.

The care home property

The quality, location, and compliance history of the care home you’re purchasing all impact funding decisions. A well-maintained property with strong occupancy levels and a good regulatory record will improve your chances of securing a competitive loan.

Banks will also want to see that the property meets current care standards, and may require an independent valuation and survey as part of the process.

Support is key for first-time buyers

Buying your first care home is a big step, but you don’t have to go it alone. Working with an experienced broker who understands the care sector can be the difference between a rejected application and a well-structured funding deal.

At Christie Finance, we’ve helped many first-time buyers secure the bank funding they need to get started in the care sector. We’ll guide you through the full journey, from preparing your application to negotiating terms with lenders, so you can focus on building a successful care business.

To speak about funding for your first care home purchase, get in touch with Jimmy Johns: jimmy.johns@christiefinance.com or 07711 767 593.