Since launching its specialist care home team in September 2021, Allica Bank has seen over £180m of care home businesses enquires.
According to the challenger bank, this deluge of demand has been driven by existing operators looking to expand, new entrants moving into the market, and a reluctance among established lenders to extend finance to the social care space.
Allica launched its specialist team to provide care home operators, brokers, and first-time buyers with targeted expertise. In April, the bank increased the maximum exposure for care home customers to £10m in a move designed to help operators ‘strengthen and scale their businesses’.
With the bank now able to lend based on both the value of the existing business as well as the underlying property asset, Allica says the changes will benefit experienced care home operators in particular, although it has also restated its firm commitment to supporting new entrants to the sector, who it says are ‘a particularly underserved segment of the market’.
According to Brian Bovell, one of Allica Bank’s specialist care home relationship managers: “Incumbent banks tend to steer clear of the care home sector altogether because of the added levels of complexity when assessing transactions, and this is exactly why Allica has doubled down on it. We have identified the importance of giving brokers and customers access to that market expertise ourselves, and it’s proven to be incredibly popular so far.
“First-time buyers in particular often struggle to get the finance they need. This is a real worry considering their importance to the long-term sustainability of the sector, which is adjusting to a post-pandemic world and an ageing population. We’re pleased to be one of the few banks with the capacity to help them.”
Nick Baker, chief commercial officer at Allica Bank, added: “This vital sector needs all the support it can get following the pandemic, and I’m pleased that Allica is able to provide that. We’ve had fantastic feedback from our broker community since launching our specialist team last year, and we have big plans to expand our proposition even further in the coming months.”
