- Loan size
- £300k – £15m
- LTV
- Typically up to 65-70%
- CQC rating
- Good/Outstanding preferred by most lenders
- Term
- 10-25 years for property
CQC rating and its impact on lending
A CQC rating of Requires Improvement or Inadequate significantly narrows lender appetite and increases pricing, since it signals regulatory and reputational risk alongside the financial one. Lenders will usually want the current inspection report and a credible improvement plan if the rating isn't Good or Outstanding, rather than an outright decline in every case.
Occupancy levels and revenue assessment
Lenders assess affordability against actual bed occupancy over recent trading periods, typically wanting to see occupancy sustained above 85-90% for the strongest terms. A newly opened or recently expanded home still building occupancy is assessed more cautiously, sometimes with a step-up repayment structure reflecting the ramp-up period.
Staffing costs and National Living Wage pressure
Staffing is the largest cost line in most care businesses, and recent wage increases have squeezed margins across the sector. Lenders now look closely at staff cost as a percentage of revenue and recent trend, rather than historic margins alone, when assessing serviceability.
Purchasing an existing care business vs new development
Buying an established, trading, well-occupied home is financed differently to funding a ground-up new-build care facility, which carries development risk, planning conditions specific to care use class, and a longer road to stabilised occupancy. Both are financeable, but the leverage, term and lender panel differ substantially.
Registered provider and CQC registration transfer
Purchases require the new operator to obtain CQC registration, which can take several months; lenders structure completion timelines and sometimes interim arrangements around this regulatory process rather than assuming a standard property completion timeline.
Frequently asked
Can I get finance for a care home with a lower CQC rating?
It's harder but not impossible — a smaller panel of lenders will consider it with a credible improvement plan and evidence of steps already taken, usually at higher pricing.
How is occupancy factored into the loan amount?
Lenders typically model affordability against sustained occupancy levels rather than peak or one-off figures, and will often stress-test at a slightly lower occupancy than current trading.
Can I finance a new-build care home development?
Yes, through specialist healthcare development finance, though it's assessed with more caution than an established trading home given planning, build and occupancy ramp-up risk.
Does CQC registration delay completion when buying a care home?
It can — registration transfer takes time, and we build realistic timelines with lenders and solicitors around this rather than assuming a standard completion date.
Are staffing costs assessed differently to other sectors?
Yes, given how dominant they are in the cost base — lenders look closely at staff cost trends and agency staff reliance as an indicator of operational stability.
Discuss your care home finance needs
Call 0345 2690628 — we work with lenders who understand CQC and occupancy assessment.
Related reading
Situations this applies to
Looking for local coverage? Commercial Loans by town · All areas we cover