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Senior Care Business Loans & Financing Options

Pre-Qualify for a Business Loan

With more people getting older each year, the demand for senior care is on the rise. It has been estimated that over 77 million "baby boomers" will be retiring over the next 20 years. As such the market for business owners and entrepreneurs to open senior care businesses and assisted living facilities has never been better, and only stands to rise as more people reach retirement age. In fact, the projected earnings for the senior care center industry are expected to top $300 billion per year by 2016.

There are several different types of senior care businesses such as senior housing, nursing homes, assisted living facilities, home care services, senior transportation services, and of course medical services. The type and size of the business will determine the financing needs which can include facility costs, equipment, training, licensing, staff, insurance, and supplies. Many senior businesses are independent and several are franchises.

The financing options available will depend upon the type of senior care business you are looking to finance.

Senior Care Business Loans: Which Product Is Right For Me?

Conventional Loans

A Conventional loan can be broadly defined as a loan, generally offered by a bank or non-bank lender that is not tied to or affiliated with any government program. Conventional loans can include construction loans, real estate acquisition or refinancing, equipment loans, working capital loans, and lines of credit. Credit standards on conventional loans are usually higher, because the lenders assume the full risk of the loan. If your business qualifies for a government backed loan you may find better terms which come with bureaucratic hurdles and regulations to overcome.

FHA and SBA Loans

The Section 232 loan program is administered by the U.S Department of Housing and Urban Development (HUD). It is a loan program that provides for a Federal Housing Administration (FHA) insured loan product. It can be used to finance the purchase, refinancing, construction or rehabilitation of nursing homes, assisted living facilities and board and care facilities. The loan insurance is available to FHA approved lenders and will generally provide the borrower with the ability to get a lower rate, longer term loan and often without a personal guarantee. The Small Business Administration's (SBA) 504 and 7(a) loan programs are available to small businesses in the senior care business. The SBA backs a percentage of the full loan (usually up to 75% for 7a loans and up to 40% in enhancements for 504 loans). The SBA requires that those participating in their loan programs adhere to their stringent loan eligibility requirements, including the SBA Standard Operating Procedures for loan underwriting.

Asset Based Lines Of Credit

Senior service small businesses can opt for asset based lines of credit for short term funding. Asset based financing comes in the form of either term or revolving loans which are secured by assets such as equipment, real estate, inventory, or receivables. They can be structured as conventional or SBA loans.

Unsecured Business Line Of Credit

Existing businesses or start-ups (depending upon the creditworthiness of the guarantors) may not have the necessary collateral available to secure a conventional loan, and that is where unsecured credit comes into the picture. With unsecured credit, the lenders assume all of the risk and open lines of credit based on the borrower's personal financial strength, as well as business’s cash flow. Most unsecured lines of credit have very strict qualifications in order to lenders to assume the risk of the money being requested.

Seller Carry Finance

For entrepreneurs looking to purchase an existing senior care business, it is usually possible to negotiate financing with the seller. Instead of getting the full price from the buyer, both parties negotiate terms and pricing, and an agreed rate of interest. The advantage to seller carry financing is that the existing senior care center owner will usually help with the transition in ownership, training, and introducing the buyer to suppliers in order to ensure the success of taking over the senior care center.

Apply For A Senior Care Business Loan

Listed above are just a few of the financing options available for senior care businesses. The availability of senior care financing varies from bank to bank, and lending institutions offer senior center loans of every operation size imaginable. However, applying for senior care center financing requires the business owner to supply a list of supporting documents such as a business plan, history of sales, resumes for all owners, and a detailed report that includes projected earning.

You can easily apply for a senior care center loan with one of the 5,000 lenders on BoeFly. A single loan request through BoeFly is the fastest and most efficient way to seek the senior care center loan that best fits your operation. Many individual financial lenders and banks can start the loan process, but only BoeFly helps senior care business owners by creating competition among lenders for their business, which in turn gives you a wide array of funding options, pricing, and terms.

Ready to start? Take our free Fundability app to see how fundable you are today! Or contact BoeFly at 1-800-277-3158 for a free consultation. Need more information download our free e-book The Complete Guide to Small Business Lending.