Industry sector:

Care home: Loans/grants


It may be that you don't need to borrow any money to start up your care home business. However, many new businesses do need to raise money to cover:

  • the initial start up costs such as furniture, medical equipment, fittings and fixtures and smaller items such as business stationery
  • working capital

It may be that you intend to purchase an existing business as a going concern and need financial assistance with the purchase price. Perhaps you intend to carry out extensive refurbishments to an existing building such as a large old house or hotel - or even build a new care home from scratch.

Buying and/or converting a care home is generally a major investment, so you may well need to arrange a significant amount of finance. This might include a commercial mortgage.

Working capital

There will almost certainly be an initial period when your care home business is getting established and your occupancy rate is still building up to its full potential. During this period you will still have to cover expenses such as:

  • staff wages, and your own living expenses
  • residents' food and provisions
  • premises costs (rent, rates, heat and light and so on)
  • other operating costs, for example laundry and cleaning

Because your fee income may not be enough to cover these outgoings during the early days, you will probably need to set aside some cash, or 'working capital', to tide you over.

If you need to ask the bank for a loan to cover your start-up costs and working capital, leave this entry in the cash flow empty until you have completed the rest. This will give you an idea of the shortfall between income and expenditure.

If your figures show that you're likely to need to borrow money, it's wise to check at an early stage in your planning that funds are available on terms that are acceptable to you.

Grants and other funding

You may be able to get some financial help in the form of a grant, possibly to cover the cost of any training needed by you and your staff.

You can get information on grant aid and other types of funding available throughout the UK from the business finance and support finder tool on the Gov.uk website.

Grant aid varies considerably around the UK and some assistance may be available in your area to help you start up your business.

It is also worth contacting the business support unit in your local council if it has one. Sometimes local grants are available for things like helping new businesses in economically run-down areas. You can also use the tool on the Gov.uk website to help you identify any suitable sources of local and regional funding.