Your Guide to Financing a Home Care Business Franchise
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As the economy fluctuates and the business sector shifts, the elder care market is booming. The demand for in-home care has grown year over year, fueled by members of the baby boomer generation who need help with daily activities but much prefer to receive it in the comfort of familiar surroundings. Long-term care, including services like personal care, transportation, meal preparation, and more, has bloomed into a $1.2 trillion market and growing.
This trend, understandably, has many aspiring entrepreneurs wondering how to start a home care business of their own. Joining an established franchise like ComForCare can be a rewarding investment in your future, giving you the foundation you need to start your own successful in-home care business.
Funding a Franchise: What Aspiring Franchise Owners Need to Know
Starting a senior care business is a great investment for people who are passionate about helping older adults and ready to make a living. Funding a franchise can seem daunting, though, especially if you’re starting with limited capital. Don’t worry—with the right combination of financial strategies, there are ways to make it happen.
How Much Does it Cost to Start a Caregiver Business?
One of ComForCare’s advantages is its affordability. Our low initial investment (between $29,500 to $59,000) allows you to enter this fast-growing market quickly and maximize your earning potential. The total investment ranges from $72,975 to $163,925, depending on your territory. This covers expenses such as:
- Office space and expenses for 3-6 months
- Office equipment
- Licensing and permits
- Legal and professional fees
- Travel expenses for training
- Professional liability insurance or other applicable types of insurance
- Marketing and advertising
While the startup fee is an upfront cost that those starting independent home care agencies won’t incur, there are significant trade-offs. Without the support of a franchise system, aspiring home care business owners may have to spend roughly the same amount, if not more, in their early years. That kind of investment doesn’t come with the proven business model, one-on-one support, training, and branding and marketing resources a franchise affords.
How much do senior care franchises make?
The ultimate answer is—it’s up to you. With the size of our aging population, the market is ever-growing, meaning you have a world of opportunity to expand your client base and grow a successful business. In an industry with an average sales rate of $98K, plenty of ComForCare franchises generate $1 million or more annually.
Home care services are in high demand in the United States and Canada. As such, franchisees have diverse avenues to provide long-term care that makes a difference in people’s lives.
Financing Options for Your Senior Care Franchise
ComForCare’s robust support system empowers franchisees to feel secure about their investment. Additionally, various financial avenues can help you secure the funding you need. Here's an overview of some popular options.
SBA Loans
Backed by the federal government, SBA loans (particularly the 7(a) program) offer low interest rates, come with manageable repayment options, and are easier to acquire due to the government guarantee. To qualify, you'll typically need a good credit score (640+), a down payment (around 20%), and some prior business experience.
These low-risk loans can also be combined with other funding sources, making them an attractive part of many franchising business plans. Thankfully, ComForCare’s established name and networks can streamline the process.
Pros:
- Low interest rates and manageable repayment options due to government backing
- Easier to qualify for compared to traditional loans
- Provides a significant chunk of funding for your franchise
Cons:
- Not typically an option for those in the process of rebuilding their credit or who don’t have a sufficient downpayment
ROBS (Rollover for Business Start-up)
This strategy lets you tap into your retirement funds—401(k) or IRA—to fund your franchise. The ROBS process bypasses the penalties that normally trigger when a person withdraws funds before the age of 59 ½. Another major benefit is that, with ROBS funding, you won’t have monthly loan payments.
However, this option means that you’ll be taking from your eventual retirement, so it’s important to have a solid plan in place to rebuild those funds. Having a trusted financial advisor in this process is always a great idea.
Pros:
- Access retirement funds (401(k) or IRA) penalty-free to finance your franchise
- Avoids monthly loan payments, freeing up cash flow
- Allows you to leverage existing savings without taking on debt
Cons:
- Requires a sufficient amount in your retirement account to cover startup costs
- You'll miss out on potential long-term growth on those retirement funds
Portfolio Loans
If you have a strong investment portfolio, a portfolio loan allows you to borrow up to 80% of its value. This frees up capital without needing to sell your assets, which can continue to grow and generate income.
Pros:
- Access up to 80% of your investment portfolio's value for funding
- May offer lower interest rates compared to unsecured loans
Cons:
- Requires an investment portfolio of at least $85,000 to qualify
- Your portfolio's value could decline, putting your loan at risk
- Interest payments can eat into your investment returns
Unsecured Loans
Candidates with good credit scores and low credit utilization may be eligible for an unsecured loan. Unsecured business loans can provide up to $150,000 without requiring collateral. This can be a fast option for those who need working capital quickly.
Pros:
- Fast funding option (funded within 3 weeks for qualified candidates)
- Because no collateral is required, it’s ideal for those without assets to pledge
- Can be a good option for smaller funding needs or working capital
Cons:
- Typically requires a credit score of 690 or higher and credit utilization under 50%
- Higher interest rates compared to secured loans like SBA loans
- Smaller loan amounts compared to other options
Franchise Funding Partners
ComForCare has partnered with trusted lenders to offer franchisees a wider range of financing solutions. Speak with our franchising advisor to connect with a partner who can explore your funding plan options with you.
Invest in Your Success with ComForCare
As a ComForCare franchisee, you’ll be making a real difference in the lives of families by providing high-quality care services in familiar surroundings. With resources like DementiaWise training for caregivers, in-depth business training for franchisees, one-on-one business coaches, and more, you can maximize your investment in your future.
Join an Award-Winning Franchise & Start Your In-Home Care Business Today
ComForCare offers a compelling opportunity to enter an accelerating industry with a low barrier to entry and the potential for high rewards. Our comprehensive support system ensures you have the tools and guidance needed to succeed, regardless of your prior experience in the senior care industry. Ready to take the next step? Request your free franchise kit today!