Atom bank has enhanced its care home product to accept applications from first time and less experienced operators, subject to them meeting additional criteria.

This improvement 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.

The required criteria include a stressed debt service cover of 145% minimum, a maximum 70% LTV, good/outstanding CQC rated homes and 90% or more average occupancy over the last six months. A strong, experienced existing management team must also remain in situ post-purchase in order to be considered.

Atom hopes that by opening up lending to new operators, it can provide much needed funding to an important sector that faces increasing challenges. The policy change comes as care home capacity in the UK shrank in 2022 for the first time in three years, highlighting the desperate need for new entrants.

Tom Renwick (pictured), head of business banking at Atom bank, said: “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. We’re constantly looking at ways that we can make the experience of borrowing faster, easier, and better value than others in the market, and we know small changes like this can have a big impact.”