We have been helping clients get care home funding for more than 15 years and previously, our Advisor worked for a major High Street Bank in their Healthcare team.
In this sector, if you are looking for a mortgage to purchase and run a care home then experience is absolutely key. For experienced operators we can source finance of 65% of the operating concern value, subject to compliance with the National Minimum Standards. In respect of overall quality of facilities and room sizes/configuration they will consider at lower level of 60% if this criteria not met, minimum beds 25 and maximum loan term 15 years.
This doesn’t mean that there aren’t options for investors looking to make their first care home purchase, but you must have specific industry-related experience under your belt. This applies whether you are looking to run the care home yourself, or put managers in to run the establishment for you. Lenders will also be keen to see you have a registered management qualification, for example NVQ 4. If you don’t have the management qualifications then asking the existing manager of the care home to join your team may be an option, although this will mean putting them on your mortgage application.
It is worth bearing in mind that the Care Quality Commission (CQC) will also interview new entrants to the market and pass them through their application process. Criminal Record Bureau checks are also taken, and clear searches are a prerequisite.
If you want to fund the purchase of a care home that is no longer trading and you plan to refurbish or even redevelop it, then a bridging loan will most likely be your only option in the first instance. Whilst it is often easier to secure short term finance, the lender will want to fully understand your exit strategy and will most likely insist that you have both development and care home experience.
We have a range of Asset/Cashflow Providers who specialise in the sector offering competitive bespoke facilities
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For more information, please speak with one of our advisers today by calling 0345 50 50 888.