Care agency finance for domiciliary and home care providers

Yes, if the agency has been trading for less than three years and you are aged 18 or over and living in the UK. A Start Up Loan is a government backed personal loan of £500 to £25,000 from the British Business Bank, at a fixed rate of 6% a year over one to five years with no arrangement or early repayment fees, and each founder of the same business can apply, up to £100,000 in total. It suits the pre trading period of a care agency well because the money arrives before there are any client invoices to borrow against, and it can pay for the CQC application, the registered manager's salary while the agency waits to be registered, insurance, DBS checks, training, rostering software and the first weeks of wages. Lenders who fund established agencies through invoice finance or a business loan generally want to see hours being delivered first, so the Start Up Loan is the usual first rung. We help founders with the business plan and cash flow forecast the scheme asks for, and we line up the working capital facility that takes over once the first council or private clients are being billed.

Do I need CQC registration before my care agency can start trading?

Yes, in England. Providing personal care to people in their own homes is a regulated activity under the Health and Social Care Act 2008, and carrying it on without registration is an offence. The agency needs a registered manager as well as the registered provider, a DBS check for each, policies and procedures, a statement of purpose and evidence that the manager is fit for the role. CQC assesses the application and may interview the manager before it decides, and the time from submission to registration runs to months rather than weeks, so plan the cash for that gap.

• Councils and the NHS. Local authority framework agreements and NHS contracts are only open to registered providers, and many frameworks want a CQC rating before they release hours, so the early income usually comes from private clients.
• Insurance. Employers' liability cover is a legal requirement before the first carer starts, and public liability and professional indemnity cover are expected by commissioners.
• Sponsorship. The care worker visa route closed to new overseas applicants on 22 July 2025, so a new agency builds its rota from the domestic labour market and its budget should assume UK recruitment costs.
• Scotland, Wales and Northern Ireland. Registration sits with the Care Inspectorate, Care Inspectorate Wales and the RQIA, each with its own process and timescales.

GOV.UK explains the Start Up Loans scheme and CQC sets out how to register as a new provider. Our start up business loans page covers the other routes for a new business, care sector finance covers the wider sector, and invoice finance explains the facility most agencies move on to. Instant Quotes shows which panel lenders fund new and established care agencies without a credit search.

Yes. Hire purchase and contract hire are both used for small fleets of pool cars, and lenders are comfortable with an agency that can show a rota, a contract base and the hours those cars will serve. Pool cars suit rural rounds, where carers without their own transport would otherwise be unable to cover the calls, and they take the agency out of the arguments about mileage claims and worn out private cars. The cost is real, though. A pool car carries insurance for any driver, servicing, tyres and downtime, so the agency should compare the monthly rental against the mileage it currently pays before it signs for six cars. We arrange car finance for care agencies on terms that follow the contract, with electric and hybrid models where the rounds are short enough to charge overnight at the office or at carers' homes.

What mileage can a care agency pay carers tax free?

HMRC's approved amounts are 45p a mile for the first 10,000 business miles in the tax year and 25p a mile after that for cars and vans, with 24p a mile for motorcycles and 20p for bicycles. Travel between clients' homes counts as business travel, while the journey from home to the first call and back from the last is usually ordinary commuting and does not. An agency can pay less than the approved rate, in which case the carer can claim tax relief on the difference, and if it pays more the excess is taxed as earnings.

• Minimum wage. Time spent travelling between calls is working time for National Minimum Wage purposes, so the hourly rate has to cover travel time as well as the care itself, and unpaid travel is a common cause of underpayment findings.
• Business insurance. A carer using their own car for work needs business use on their motor policy, and the agency should check it, because a claim refused for the wrong cover lands on the agency's reputation.
• Pool car rules. A pool car is only free of benefit in kind for the drivers if it is kept at the business overnight, used by more than one employee and not used privately, so a car that goes home with a carer is a company car instead.
• Record keeping. Rostering software that logs the start and end of each visit also produces the mileage record HMRC expects, and lenders like to see it because it ties the hours billed to the hours paid.

GOV.UK sets out the approved mileage rates and the working time rules for the minimum wage. Our asset finance page compares hire purchase and leasing for a small fleet, care home finance covers residential services, and PAYE loans helps where a wage bill has outgrown the month's receipts. Instant Quotes shows which panel lenders fund vehicles for care providers.

A home care agency sells hours of care, and almost all of its cost is the wages of the people delivering them. The cash problem comes from the order in which money moves.

• Payroll comes first. Carers are paid weekly, fortnightly or monthly for visits already made, plus mileage.
• Councils pay in arrears. Many local authorities pay four-weekly or monthly in arrears, and often only after electronic call monitoring data has been matched against the commissioned care plan. Missed or short visits are queried, and the queried amount waits.
• New packages cost before they pay. Taking on a hospital discharge or a new framework area means recruiting, vetting, training and paying carers weeks before the first remittance.
• April is a pinch point. The National Living Wage rises each April, but council fee uplifts are sometimes confirmed late and backdated. The April 2025 rise in employer National Insurance added to the same squeeze.
• Winter demand. Hospital discharge pressure raises volumes just when staff sickness is highest and overtime costs rise.

Illustration. A hypothetical agency's weekly payroll for council work is £20,000. The council pays four-weekly in arrears and typically settles about two weeks after the period closes. By the time the first remittance arrives, the agency may have paid around six weeks of wages, roughly £120,000, from its own cash. Every new package widens the gap. An invoice finance facility advances part of each four-weekly invoice when it is raised, so the gap shrinks to the portion not advanced and any queried visits.

• Invoice finance terms. Many facilities have minimum periods and notice or termination fees. Read the exit terms as closely as the advance rate.
• Borrowing will not fix a rate below cost. If a contract pays less per hour than the hour costs to deliver, finance only speeds up the losses. Negotiate the rate, or reduce hours on that contract.
• Re-tender risk. Losing a framework can remove a large share of income at once. Lenders will ask what happens if that occurs; so should you.
• Personal guarantees are usually required, including on invoice finance, where they often cover warranties about the invoices.
• Tax arrears. For a VAT or PAYE bill, compare borrowing with HMRC Time to Pay; see HMRC loans. Most care services are VAT-exempt, but staff agency or other supplies may not be.