Monday 18 November 2019
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Are The Banks Lending ?

Probably one of the most asked questions within our industry over recent years. Well, in a word, YES!

All of the major Banks have significant funds which they are keen to lend, and they remain supportive of the Care Home sector.

In their desire to attract quality new business lending they have a variety of incentives available, including cash back, fee free, and discounted interest margins. Also over the past few months I have noticed that Interest margins have softened, and although not back to their pre-crisis levels, there has been a marked improvement and represent good value.

So, could now be the right time to consider pursuing your strategy of :

  • Acquisitions

  • Extensions

  • Refinance

The main areas that the Banks need to be satisfied with are known as the three Ss :

  • Stake – the Owner`s contribution, this can be either a cash introduction or existing equity.

  • Security – the means by which the Bank will be repaid if the business cannot meet it`s loan commitments.

  • Serviceability – the ability to cover the monthly loan repayments.

Banks will also take into account information about the business owners : their background, track record, experience, credit history.

So, what is the best way to approach the Banks for the financial support required to meet your objectives ?

Firstly, your Accountant needs to be up to date with the financials and supportive of your ongoing plans. The use of a specialist “ Healthcare Broker “ will help in the negotiation process with a number of Banks at the same time, and will ensure that any application for a loan is presented efficiently and comprehensively.

Information required will include :

  • Historic Accounts – last 3 years

  • Current year Management Accounts

  • Projections – if materially different from the historic

  • Current and historic Occupancy Levels

  • Any recent Professional Valuation if available

If you would like to discuss further please contact David Hunt through the following link :