The firm says its new lending standards include a stressed debt service cover of 145% minimum, a maximum 70% loan to value, good to outstanding Care Quality Commission-rated homes and 90%, or more, average occupancy over the last six months.   

It adds that a strong, experienced existing management team must also remain in place post-purchase to be considered for a loan.  

The business says the move “is part of the bank’s push to support vital sectors, such as health and social care, that can find it difficult to access credit”.  

It comes as UK care home capacity shrank by 230 beds last year, according to data earlier this year from CSI Market Intelligence, the biggest fall since 2019.  

Also, the figures also showed that 247 care homes closed their doors last year, while 123 new businesses opened. This is the lowest number of new entrants to the market since 2015.  

Atom bank head of business banking Tom Renwick says: “We know the care home sector is facing a range of challenges at the moment.  

“Their services are vitally important to the UK, yet they are drastically underserved by lenders, particularly when it comes to helping much-needed new operators enter the market.  

“By addressing this gap, we hope more first-time operators can access the finance they need to get started and provide this much-needed service.”