You cannot operate a care provider without approval from the regulator, the Care Quality Commission (CQC). The process for approving a new, first-time owner can take around six months so, if you are in this situation, you should inform the CQC as soon as your offer is accepted.

This depends on a number of factors, including what you can afford. If you want to buy commercial premises using a self-invested personal pension, or as an investment, then you will need to look at freehold properties. If your main interest is in growing the business rapidly, and having maximum flexibility, then leasehold could be the better option.

A number of factors will affect the price you pay for a business. These include whether it operates from a freehold property, which you will own outright, or if you will be renting the premises. Usually the price of a business will be calculated as a multiple of net profit plus the value of any assets, although in a sector as exposed to demographics and government policy as care provision, forward-looking revenue projections can be just as valuable historical trading figures. Location can play a big role in the value of residential care and nursing homes, particularly if you are purchasing the freehold.

When buying a care provider it is usually best to buy the company which operates the business. This means that all contracts with users/residents, staff and suppliers continue uninterrupted, minimising disruption. One exception to this might be if you were acquiring a residential home with serious financial or regulatory problems which would require a complete turnaround.

If you buy a business that is still trading then any staff will have the right to stay on with that business, whether you buy the company or just the assets. You might be able to make staff redundant if their skills do not match your requirements, but this is unlikely to be how you want to start your journey with a new business. If you want to start from scratch with all your own staff it might be better to buy a closed business – although care businesses can take some time to build up to full capacity, and profitability.

Whether you are investing your own money or borrowing to buy a care business, you should satisfy yourself that the business will generate enough money either comfortably to cover your loan repayments or to provide you a healthy return on your investment. Our advisers can help you with this calculation and, if borrowing to fund the purchase is appropriate, can put you in touch with a range of specialist lenders.