Funding in the health and care sector - ten years on


Recent anniversaries of events such as the closure of the US bank Lehman Brothers and the near collapse of Royal Bank of Scotland ten years ago bring back unpleasant memories for some of us of the global financial crisis.

In the aftermath, businesses of all kinds were affected by the ‘credit crunch’, the large reduction in funds available from the mainstream banks.

There were some high profile failures in the health and care sector as a result but, ten years on, what is the outlook for finance in the sector? If Birkett Long’s experience is anything to go by, the availability of funding is much improved. Over the last eighteen months, we have advised care home providers on increased facilities provided from high street banks and new opportunities funded by a real estate investment trust (REIT); and we have advised other health care businesses on new funding facilities.

Banks are clearly back in the market for the right opportunities. Historically low interest rates mean that debt costs as little as it ever has. Alternatives to traditional banks have also grown over the last few years, whether in the form of REITs, or the ‘challenger’ banks that have successfully entered the market for commercial lending. Private equity investors also remain interested in growth opportunities in specialist services in the health and care sector. For smaller amounts, ‘crowd funding’ via the internet is a possibility. 

If you are considering the possibility of raising new funds for your business, whether to help with expansion, improve your estate, or take some cash out to benefit from success, there are some things that you can do in advance to make sure you are in a position to make the fundraising exercise as smooth as possible. First, dust off the business plan and ensure that it is up to date and as accurate as you can make it. Affordability is a key measure for funders and having a plan that shows you will have the income to afford interest payments, and the cash to make repayments with, is going to be crucial.

Secondly, review the paperwork relating to your premises, as property still remains the most important means of granting security for debt. If you lease your sites, are there restrictions on charging the property as security? If you want to spend new money on extensions or refurbishment, are there lease provisions that have to be followed, and what is the position on planning permission? At Birkett Long, we can help review your property documents, to ensure there will be no last minute problems with giving security or fulfilling your plans.

If you are not sure how to go about raising funds, contact your Birkett Long adviser. We have relationships with the health and care specialists at the banks and with private equity investors and we may be able to steer you in the right direction. I can be reached on 01245 453817 or

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.