senior care business acquisition

Senior Care Business Acquisition Financing: 5 Things Lenders Want

If you are considering senior care business acquisition, there are a few key components to consider. In addition to strong personal credit, your lender will be interested in these five elements when examining the loan request.


  1. Positive Trend.  Nothing scares lenders more than negative sales and earnings trends in a business or its industry. Conversely, a pronounced positive trend is a thing of beauty to a lender. They often look back several years to see how the business performed through past economic cycles.
  2. Business Plan.  Buyers are required to submit a basic business plan for the senior care business they are acquiring. Lenders want to see an intimate understanding of the business and industry. In most cases, a plan calling for modest growth and incremental change is the safest bet.
  3. Continuity.  Commitments by existing managers, key personnel, suppliers and customers to continue with the new owner represent reduced risk to a lender.
  4. Seller Training.  Lenders want to see a well-thought-out management transition plan. The training/transition period can be anywhere from 1 to 12 months, depending on circumstances. Be sure to negotiate this point up front and clearly spell it out in the purchase agreement.
  5. Seller Financing.  When a seller finances even 10-15% of a deal, subordinated to the bank note, it shows the lender that the seller is confident in the business under the buyer’s leadership. This deal point is commonly imposed by lenders.


If you are looking to purchase an assisted living facility or home care business, financing is readily available. Talk to your lender about your loan options and how to prepare for financing.