Quick answer
Aged care providers typically borrow to cover the gap between paying staff and receiving government payments, buy vehicles and technology for home care, refurbish facilities, and buy smaller providers. A line of credit or working capital loan suits claim gaps, equipment and vehicle finance suits assets, and property-secured loans suit refurbishments and acquisitions. Lenders read the sector cautiously since the new Aged Care Act, so clear numbers matter.
Key points
- Under Support at Home, which started on 1 November 2025, providers claim for services already delivered, so wages are paid before the subsidy arrives
- StewartBrown's FY26 survey found about two-thirds of residential aged care homes reported an operating loss, which keeps lenders cautious
- Providers can now retain 2% of a refundable accommodation deposit each year for up to five years, a new income line lenders are starting to model
- Smaller home care and residential operators often fall between a bank's appetite and specialist institutional lending, which is where non-bank options help
Aged care has had more rule changes in the past year than most industries see in a decade. The new Aged Care Act started on 1 November 2025, the Home Care Packages and Short-Term Restorative Care programs gave way to Support at Home that same day, and residential accommodation payments were reworked. Providers have spent the year adjusting systems, rosters and pricing.
Lenders have been watching all of it. This page explains how they now read an aged care business, what providers typically borrow for, and how to put forward an application that holds up.
Why are lenders cautious about aged care right now?
Mainly because of margins. StewartBrown’s aged care financial performance survey for the 2025–26 year, published in October 2026, put the share of residential homes in its sample running at an operating loss at roughly 65%, even though average occupancy rose to about 95%. Its Support at Home survey also recorded an operating deficit in the June 2026 quarter.
Borrowing is still very much possible. Beds are full and demand from an ageing population isn’t going anywhere. It does mean assessors look harder at:
- Whether the business is profitable now, under the new funding settings, not two years ago
- How much of the cost base is wages, and how rostering is managed
- Compliance with the strengthened Aged Care Quality Standards, and recent audit outcomes
- Cash reserves, and in residential care, how refundable deposits are managed
A provider that can show a clear, current picture will get a much better hearing than one relying on pre-reform figures.
How does Support at Home affect a provider’s cash flow?
Under Support at Home, Services Australia administers client funding and providers claim through the Aged Care Provider Portal or integrated software. Claims can only include services that have already been delivered.
That sounds like a small administrative point. In practice it means a home care provider pays support workers, nurses, allied health contractors and travel costs first, then claims, then waits for the payment. A growing provider taking on new clients, or one whose claims are rejected and need correcting, can find a sizeable amount of money sitting in that gap at any time.
For a lender, the key questions are:
- How many active clients you have and how that number is trending
- The usual time from service delivery to payment, based on your records
- Your claim rejection rate and how quickly corrections are resubmitted
- Whether client contributions are being collected reliably
For many providers the tidiest answer is a business line of credit. It’s drawn when claims are outstanding and repaid as payments land, so you only pay for the days you use it. The cash flow gap calculator helps estimate how big the facility needs to be.
How do refundable deposits shape a residential provider’s borrowing?
Refundable accommodation deposits are a defining feature of residential aged care finance. A resident pays a lump sum, the provider holds it, and it must be refunded when the resident leaves or dies, subject to the rules.
Under the new arrangements from 1 November 2025, providers can retain 2% of a RAD or refundable accommodation contribution each year for up to five years, to a maximum of 10%. Retained amounts don’t have to be refunded. The rules apply to residents who entered care on or after 1 November 2025, or re-entered after a break of more than 28 days, and the five-year period runs from when the deposit was first paid.
For lending purposes:
- RADs are a liability, not equity. Lenders treat the pool of deposits as money owed to residents, and they’ll check that the provider keeps enough liquidity to meet refunds on time.
- Retention is new income. Over time it adds a steady revenue line, and lenders who understand the sector are starting to factor it into serviceability.
- Permitted uses still apply. Deposit money can only be used for specific purposes under the aged care rules, so treating the deposit pool as spare cash for operations isn’t an option.
What do aged care providers borrow for?
| Need | Typical facility | Reasoning |
|---|---|---|
| Wages while Support at Home claims are processed | Line of credit or working capital loan | Bridges the gap between paying staff and receiving subsidy |
| Cars for support workers, accessible vans | Commercial vehicle finance or a chattel mortgage | Vehicles secure the loan |
| Rostering, care management and claiming software, devices | Equipment finance or a term loan | Spreads the cost of systems needed under the new Act |
| Refurbishing rooms, bathrooms, common areas | Secured business loan or commercial property loan | Larger sums need property security |
| Buying a smaller home care or residential operator | Business acquisition loan | Assessed on client base, compliance record and current profit |
A note on size: large residential developments and major rebuilds are usually funded by banks and institutional lenders with dedicated aged care teams. Our range runs from $5k to $5m, so we’re most useful to home care providers, smaller residential operators and specific projects within a larger business.
Wages due before the next claim payment? Start an enquiry; expect to spend a minute on it, with your credit history left untouched.
What do banks look for, and when do other lenders step in?
Banks are a good first stop for established aged care operators, particularly those with freehold property and stable results. Their pricing is usually the sharpest available, and several have teams that understand aged care funding.
Non-bank and private lenders tend to help when:
- The provider is profitable but has only a short track record under the new funding model
- The bank wants another year of results before increasing limits
- A purchase or refurbishment has a deadline the bank can’t meet
- A one-off event, such as a cluster of RAD refunds or a delayed claim run, needs short-term cover
Property-secured lending, including second mortgages and caveat loans, can provide quick access to funds when an owner has equity in commercial or residential property.
Documents to prepare
- Six to twelve months of statements from the business account
- Financial statements for the past two years and year-to-date management accounts
- Evidence of registration under the new Act and recent quality audit results
- Client numbers (home care) or occupancy and resident mix (residential)
- Claiming reports showing payment timing and any rejections
- For residential care: RAD balances, refund history and liquidity arrangements
- Quotes for vehicles, equipment or works
Example: a home care provider growing after the switch
A hypothetical case for illustration. A family-owned home care operator in central Queensland looks after roughly 140 older clients with domestic help, personal care and transport. Under Support at Home, client numbers grow by a third in nine months as new assessments come through.
Growth is welcome, but the owners now pay a bigger fortnightly payroll before claims are paid, and two new support workers need cars. The bank is supportive but wants audited figures for a full year under the new program before lifting the overdraft.
They arrange a revolving facility, sized from recent account conduct, to sit behind the claim gap, and finance the two cars against the vehicles themselves. They also tighten claiming, submitting weekly instead of fortnightly and fixing a recurring data error that was causing rejections. Twelve months on, with a clean year of results under Support at Home, they return to the bank to refinance the line of credit.
Bringing your funding plan to us
Providers care for people who can’t always speak up for themselves. The finance side should be simpler than the care side, and we try to make it that way.
The enquiry takes roughly a minute to complete. It doesn’t involve a credit check, so it has no bearing on your credit standing. Nothing gets broadcast to a list of financiers. Instead, someone here reads your enquiry closely and phones to discuss it. If you can, give exact figures for revenue, claims outstanding and what the money is for: it’s the surest way to land on a workable option at the first attempt.
Frequently asked questions
Can a home care provider get a loan to cover Support at Home claim delays?
Yes. A business line of credit or working capital loan is the usual fit. Lenders will look at your client numbers, claiming history and how long payments typically take to arrive, along with your bank statements.
Do lenders count refundable accommodation deposits as an asset?
Not in the way providers sometimes hope. A RAD is money held for a resident and repayable when they leave, so lenders treat it as a liability. They look at how the provider manages RAD liquidity and refunds, and may count retention amounts as income.
Can I borrow to buy a small home care business?
It's possible. Lenders focus on client numbers and retention, staff stability, the seller's registration and compliance history, and recent profit under Support at Home rather than older Home Care Packages figures.
Do banks lend to aged care providers?
Yes, particularly to established operators with sound finances and property. Banks are often the cheapest source of funding and worth approaching first. Smaller providers, or those going through a tough year, may find non-bank or property-secured lending easier to arrange quickly.
What documents do lenders want from an aged care provider?
Usually bank statements, financial statements, BAS lodgements, evidence of registration, recent quality audit outcomes, client or occupancy numbers, and for residential care, RAD balances and refund history.