Securing a Commercial Mortgage for a Care Home Operator with Previous Business Failure

At Positive Commercial Finance, we specialise in arranging commercial mortgages for care home operators in complex situations where high-street lenders often decline. This case study shows how we helped a care home director refinance a private loan into a suitable long-term commercial mortgage, despite significant challenges.

The Challenge

The client had purchased a care home property and business using a private loan. The lender was applying strong pressure for full repayment.
Key obstacles that needed to be overcome included:
A failed care home business from five years earlier
A poor CQC (Care Quality Commission) audit rating
These factors made many lenders reluctant to proceed, as care home lending typically requires strong regulatory history and proven business stability.

Our Approach

We identified specialist lenders who take a pragmatic view of previous business failures when supported by a clear explanation and evidence of improvement.

We provided:

A full, transparent account of what went wrong in the previous business and the valuable lessons learned
Detailed analysis of the current CQC report
Evidence of the remedial actions already taken, including the appointment of a new registered manager and key operational staff
By presenting the full picture professionally and highlighting the underlying strengths of the business, we helped the chosen lender gain confidence in the proposition.

Deal Structure
Loan to Value (LTV): 60%
Interest Rate: 7.75% per annum
Arrangement Fee: 1.5%
Term: 20 years

The Outcome

The lender became comfortable with the deal because, at its core, it was a profitable care home business backed by a good-quality asset.

Positive Commercial Finance successfully facilitated the perfect commercial mortgage for the care home operator, giving the client long-term, stable funding and removing the pressure from the private lender.