Lenders supporting the care sector - challenging times but positive signs

Despite the complications of lockdown, we have continued to speak with a lot of Care Home operator clients, old and new. Having been at the forefront of the pandemic, operators have been forced to remain dynamic during the hardest of circumstances and are now at the forefront of industries to face the future with this intense experience under their belt.

During the last 15 months, we have found clients disappointed to see that support for acquisitions from some lenders has been difficult, especially for new entrants and purchases of Care Homes with chequered trading or compliance histories. The Government-backed CBIL and BBL schemes offered significant support to operators, although certain finance options were sadly oversubscribed. These schemes are now closed to new applications.

Recent conversations with an increasing range of lenders who recognise the Care Sector (including some new faces) have underlined our confidence that there are flexible options available when you know where to look. The Recovery Loan Scheme has been launched using the extra security of the Government backing to facilitate additional funding for businesses impacted by Covid-19. Lenders using the Scheme can take a view on fluctuating trading performance since the pandemic, as the Scheme offers a guarantee for the majority of the debt*. These lenders are seeking to extend lending parameters, and we are seeing positive early signs such as 80% loan to value options and reduced requirements for Personal Guarantees.

Lenders frequently share with us the value their underwriters place on our comprehensive professional proposals. Some options are available only via introducers; as renowned specialists in the sector, we welcome being offered exclusive access to early applications.

Given how challenging times have been for some borrowers, we are anticipating there may be strong demand for terms from the more flexible lenders. We are already submitting a flurry of enquiries on behalf of borrowers who have been feeling unsupported by their current finance options.

Some examples of recent deals agreed:

70% LTV agreed for existing operator 100% Funding Agreed for refinance and acquisition for group operator New Entrant funding agreed on competitive terms Loan Sanction for new to market lender LTVs up to 85% subject to criteria Existing operator purchase of 2nd care home 3.63% over base Existing operator purchase of 3rd care home 2.5% over base

If you are considering reviewing your current financial position, please contact us. We can advise you on the full range of options available. If you would like to arrange a convenient, confidential discussion, we can arrange a video or telephone call at a convenient time for you. Please email us at finance@chandlerandco.co.uk and we will be happy to help.