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• 18 Feb

  Funding Care Homes For Disadvantaged Children

  

  Every now and then we have the chance to get involved with arranging funding for businesses that are really providing essential services to their local communities. This has been the case recently when we have been able to assist with the funding of several care homes for disadvantaged children.

  Funding Care Homes For Disadvantaged Children

  One of these was a new start care home, assisting children that had a range of difficulties from behavioral issues through to autism. The organisation was providing shelter homes, with carers on site around the clock, providing 24/7 care.

  I have posted previously about how we have been involved with funding staff for care homes: Funding Care Staff Recruitment. This time is was the invoices to local authorities for the provision of the care that needed to be financed, as the homes were mainly using their own employed staff, rather than temporary staff.

  Invoices To Borough Councils

  The debtors were local borough councils, so the care homes were not really worried about debtor failure. Hence they don't tend to require bad debt protection. The issue is more needing to get access to the proceeds of their invoices to the councils immediately, rather than having to wait for the local authorities to pay. This can take time and involve administration before the funds are received.

  As with many similar organisations, they need a flow of cash to pay for the rental of the premises, and the staff payroll. These tend to be the biggest cost burdens for these types of businesses. The homes are typically large houses that are rented, and the care staff are required to look after the children.

  The quality of the debtors also makes these invoices ideal for invoice finance, which provides prepayments before they are settled by the council.

  Finance To Support Growth

  There is a great demand for this type of shelter service, so the client we were speaking to anticipated rapid growth in the near future. Opening further properties, to serve other local authorities was part of their future growth plan. Therefore, they needed finance companies that were able to support rapid growth and expansion. Invoice finance suits growing businesses, as the amount of funding increases as more invoices are raised. In that way, as turnover grows so does the amount of working capital to finance that growth.

  By Glenn Blackman