Funding to build, convert or extend healthcare property, from a surgery extension to a purpose-built care home.
Indicative terms
- Preferred loan sizes around £1m to £10m, with larger schemes available
- Up to 72.5% of gross development value, including rolled-up interest
- Terms to three years
- Repayment on a bullet basis, from sale proceeds, or by refinance onto a term facility
- Rates from around 8.35%, depending on risk and loan size
What we fund
- New-build surgeries and medical centres
- Care homes and supported living, new build and conversion
- Private clinics, day surgery units and diagnostic centres
- Extensions adding clinical capacity to existing premises
- Conversion of existing buildings to healthcare use
- Refurbishment and reconfiguration to meet current standards
Healthcare development is not speculative development
Most development lending prices for the risk that nobody occupies the finished building. Healthcare schemes frequently do not carry that risk in the same way: the occupier is often the developer, and the income servicing the completed asset is contract-backed or demand-driven in a way that a speculative office is not.
Lenders that understand the sector price for that. Ones that do not treat it as generic commercial development, which costs more and frequently ends in a decline.
Where healthcare schemes get difficult
- Registration timing. You cannot trade until registered, and registration cannot complete until the building is ready. That sets a floor on how quickly the asset starts earning, and it is outside your control.
- The ramp-up. A new care home or clinic does not fill on the day it opens. The gap between practical completion and stabilised trading is where schemes get into trouble.
- Standards. Conversions in particular can struggle to meet current care or clinical standards within an existing structure. Contingency needs to reflect that.
- The exit. Refinancing onto a term facility depends on reaching a trading level that supports a going concern valuation. Refinancing an empty building means a bricks and mortar valuation and a much smaller advance.
The recurring theme is that the funding needs to extend beyond practical completion, not end at it. Build the pessimistic case and fund to that.
What lenders assess
- Your track record, both as a developer and as a healthcare operator
- Build cost, contractor, programme and contingency
- Planning position and any conditions
- Local demand and, where relevant, commissioning intentions
- The exit: evidenced term lender appetite, or a credible sale market
- The regulatory pathway and its timeline
Common questions
Can I develop without operating experience?
Yes, where the exit is a sale to an operator. Where the exit is you running the facility, lenders will want operating experience or a credible management team in place.
Is conversion cheaper than new build?
Not reliably. Conversions carry more cost uncertainty and often more difficulty meeting current standards. Both are fundable; conversions need a larger contingency.
What about a surgery extension?
Smaller schemes on existing premises are frequently better funded by extending or restructuring the existing facility rather than through development finance. We will tell you which route suits.
All figures are indicative and subject to lender assessment, your circumstances, valuation and prevailing market conditions. Commercial mortgages and unregulated bridging loans are not regulated by the Financial Conduct Authority. Property offered as security may be at risk if you do not keep up repayments.