Unlock funding options for expanding or renovating your aged care facility in Australia. Discover key strategies and secure finance with ease. 

Key takeaways

• Aged care demand is rising fast — with Australians aged 85+ projected to nearly double by 2040, now is the time to expand or renovate your facility (ABS, 2024).
• Government support includes the Aged Care Capital Assistance Program and low-cost financing via NHFIC for eligible facilities.
• Finance options include commercial property loans, equipment finance, and specialist healthcare lenders — each suited to different types of upgrades.
• Renovation costs vary widely — full refurbishments can cost $4,000–$7,000 per sqm, while new builds often exceed $9,000/sqm (ACCPA, 2024).
• Application success improves with a clear business case, financials, care quality data, and alignment with aged care reform priorities.
  

Introduction: Why now is the time to invest in aged care

If you're managing or owning an aged care facility, you've likely felt the pressure — growing resident waitlists, evolving compliance requirements, and a shift toward higher-quality environments. The sector is undergoing transformation, with the Royal Commission into Aged Care Quality and Safety setting off a wave of reforms.

To keep pace, many operators are turning to finance to expand or upgrade their facilities. Whether you're planning to refurbish outdated wings or build new rooms with modern clinical setups, accessing the right funding is crucial to delivering quality care — and remaining commercially viable.

Understanding the current funding landscape

Growing aged care demand

The Australian Bureau of Statistics (2024) estimates that the population aged 85 and over will increase from 542,000 today to over 1 million by 2040. This demographic shift is already driving:

• Greater demand for high-care places and dementia support
• New design expectations (e.g. private rooms, infection control layouts)
• Pressure to modernise outdated infrastructure

Government funding and policy shifts

Several funding mechanisms support capital improvements in aged care, including:

• Aged Care Capital Assistance Program (ACCAP): Offers capital grants for regional, remote, and not-for-profit facilities.
• National Housing Finance and Investment Corporation (NHFIC): Provides low-interest loans to eligible providers, especially for social and aged care housing infrastructure.
• ACAR funding (when available): May support expansion but is increasingly tied to specific policy priorities, like rural access or dementia care.

Finance options for aged care expansion or renovation

When government grants aren't enough or aren't available, these private finance options can help:

1. Commercial property loans

Ideal for major expansions or new developments. Banks and specialist lenders offer tailored packages based on your facility’s:

• Occupancy rates
• Accreditation status
• Financial performance
• Valuation and projected ROI

Pros: Large funding amounts, lower interest rates 

Cons: Requires a strong balance sheet and clear development plan

2. Equipment and fit-out finance

Useful for clinical upgrades, kitchen renovations, or installing new nurse call systems.

Options include:

• Chattel mortgages
• Equipment leases
• Operating leases

Pros: Asset-backed, flexible terms, possible tax deductions
Cons: Less suitable for large-scale building works

3. Specialist healthcare lenders

Providers such as Homecare Finance, Aged Care Financial Services, and private lenders focus solely on healthcare and aged care.

Pros: Understand the sector, flexible assessments
Cons: Higher interest rates in some cases

Key factors lenders assess

To secure aged care finance, you’ll need to present a strong application. Lenders look for:

• Occupancy trends: High and stable occupancy boosts approval odds.
• Financials: Lenders often request 2–3 years of P&L, balance sheets, and cash flow forecasts.
• Care quality indicators: Facilities with strong compliance records and no sanctions are more favourable.
• Business case: Show how the renovation or expansion will improve service delivery and returns.
• Location: Metro areas may offer lower risk, while regional facilities may attract government incentives.

Cost considerations and budgeting

Renovation and construction costs

According to Aged & Community Care Providers Association (ACCPA), costs vary significantly:

• Basic refurbishments: $3,500–$4,500 per sqm
• Full modern upgrades: $5,000–$7,000 per sqm
• New builds: $8,000–$10,000+ per sqm

Hidden or underestimated costs include:

• Fire compliance upgrades
• Accessibility modifications (e.g. widened corridors, ramps)
• Infection control layouts (especially post-COVID)
• Temporary relocation of residents during construction
  

Making your application more compelling

Here’s how to improve your chances of securing finance:

• Develop a detailed proposal: Include concept plans, timelines, builder quotes, and projected ROI.
• Highlight compliance: Show strong audit performance and accreditation status.
• Demonstrate demand: Include local demographic data, occupancy rates, and waitlists.
• Consult professionals: Work with an aged care finance broker or consultant to structure your application.

Trending priorities in aged care facility upgrades

If you're planning upgrades, aligning your project with current policy and care trends will add value and boost funding support:

• Dementia-friendly design: Open-plan spaces, natural lighting, calming colours
• Infection control: Improved airflow, separate quarantine zones
• Tech integration: Smart nurse call systems, resident tracking, digital health records
• Sustainability: Solar panels, energy-efficient lighting and HVAC systems
• Private rooms: Especially post-COVID, shared rooms are being phased out

FAQ: Common questions about financing aged care facility upgrades

Q: Can I finance upgrades without owning the land?
A: Yes, but lease terms must align with the loan term. Lenders will want evidence of site security.

Q: Do I need development approval before applying?
A: Not always, but concept plans and a feasibility study are usually required. DA is often needed before final loan approval.

Q: Is equipment finance tax-deductible?
A: Yes, in most cases. Lease payments may be fully deductible, and asset depreciation may also apply.

Q: How long does loan approval take?
A: It can take 4–8 weeks, depending on the complexity of your proposal and lender requirements.

Q: Are there finance options for not-for-profits?
A: Absolutely. Not-for-profits often qualify for NHFIC loans, capital grants, and concessional rates.

Conclusion: Investing in your facility is investing in future care

Expanding or renovating your aged care facility isn’t just about aesthetics or compliance — it’s about meeting growing demand, enhancing resident wellbeing, and ensuring your long-term sustainability.

With the right mix of government support, private finance, and a clear plan, you can position your facility for long-term success in Australia’s evolving aged care landscape.