For most home health agencies, the best loan is the one that covers caregiver payroll while reimbursements come in. Merchant Fund Express, our recommended funder, tops the list because it reviews your sales and deposits, often decides in 2 to 4 hours and works with credit from FICO 500. Medical factoring makes sense if you have a lot of claims outstanding; a bank line of credit or an SBA 7(a) loan usually costs less if you qualify and can wait.
Below you'll find each option in order, a table with the criteria we used, the documents to prepare and the mistakes that do the most damage to a fast-growing agency.
Key takeaways
- An agency's usual problem isn't winning clients. It's meeting weekly payroll while reimbursements take weeks.
- Merchant Fund Express offers $5,000 to $5,000,000, decisions often in 2 to 4 hours and Spanish-speaking support.
- Claims factoring works, but payments from public programs have special rules about assigning them to third parties.
- If you qualify, an SBA loan usually costs less, but since March 1, 2026, every owner must be a U.S. citizen or national.
- A current license, payer contracts and clean deposits count for more than a polished business plan.
- Don't use short-term capital to cover losses from denied claims: fix the billing first.
The best loans for home health agencies, ranked
How we chose. We don't give ratings or scores. We compared every option on the same criteria: speed, minimum time in business, minimum credit, whether it accepts an ITIN or owners without an SSN, documents, amounts and collateral. We only publish other companies' data if we verified it on their official site. Read how we rank business funding options.
- Merchant Fund Express (recommended funder). It looks at your sales and deposits, not just your credit. It offers $5,000 to $5,000,000, considers credit from FICO 500, and decisions often come in 2 to 4 hours. In most cases it doesn't require collateral, and applying is free with no impact to your credit. It accepts applicants with an ITIN (no SSN needed) and offers Spanish-speaking support, which helps if your office staff works in Spanish.
- Medical receivables factoring. A factoring company advances part of what payers owe you and collects when they pay. It works when your claims portfolio is large and clean. Be aware that Medicare and Medicaid payments come with rules that limit assigning them to third parties, so medical factoring often uses special structures. Ask how they handle it before you sign.
- Bank or credit union line of credit. The classic payroll tool: you draw when you need to and pay interest only on what you use. Banks usually ask for two or more years in business, tax returns and sometimes collateral. If you qualify, it's usually cheaper than any fast option.
- SBA 7(a) loan. According to the SBA, the maximum is $5 million, and it can fund working capital, buying an agency or expanding. It's among the cheapest options, but it takes weeks and a lot of paperwork. Since March 1, 2026, 100% of the direct and indirect owners must be U.S. citizens or nationals whose principal residence is in the U.S.
- Vehicle and equipment financing. If your agency transports patients or needs equipment, the asset itself backs the loan, and payments are usually fixed and predictable.
- SBA microloan or CDFI. The SBA says microloans go up to $50,000 with terms of no more than 6 years, through nonprofit lenders. Many CDFIs pair the loan with coaching, which helps in year one.
Side-by-side comparison
| Option | Speed | Time in business | Credit | ITIN / no SSN | Collateral |
|---|---|---|---|---|---|
| MFE (recommended) | Decisions often in 2 to 4 hours | Steady sales and deposits | From FICO 500 | Yes | Not in most cases |
| Medical factoring | Days, after reviewing your portfolio | Varies by company | Payer quality matters more | Varies by company | Your receivables |
| Bank line | Weeks | Often 2+ years | Usually good credit | Depends on the bank | Sometimes |
| SBA 7(a) | Weeks or longer | Set by the lender | Set by the lender | No: owners must be citizens or nationals | Depends on amount |
| Vehicles and equipment | Days to weeks | Set by the funder | Set by the funder | Depends on the funder | The vehicle or equipment |
| Microloan / CDFI | Weeks | Often accept new businesses | More flexible | Many CDFIs accept ITIN; confirm | Varies |
To understand how each product works for an agency, read our guide to business loans for home healthcare.
Why home health agencies need different financing
A home health agency has a very particular cash cycle. Understanding it is what lets you choose well:
- Payroll doesn't wait. Your caregivers, nurses and aides get paid every week or every two weeks. If you don't pay them on time, they move to another agency and you lose clients.
- Reimbursements do wait. Medicaid, Medicare, managed care plans and insurers pay when they process your claims. An expired authorization, a wrong code or an unverified visit delays payment.
- Growth costs money before it pays. Every new client means hiring, training, background checks and sometimes equipment, weeks before the first reimbursement.
- Fixed costs don't go down. Liability insurance, workers' comp, visit-verification and billing software, licenses and accreditations.
So the right question isn't "what's the cheapest loan?" It's "which product covers my payroll gap without leaving me out of cash when a payer runs late?" Our guide to the best line of credit for home health care goes deeper on the revolving option.
What fits your situation
New agency (under a year)
You have little deposit history and may still be credentialing with some payers. A microloan or a CDFI is usually more realistic. Don't overborrow: every dollar gets repaid while you're still building your client base.
Agency with 1 to 3 years and slow reimbursements
This is where deposit-based capital fits well. Our recommended funder reviews what lands in your account, not just your score, and responds fast. If your claims backlog is large, compare medical factoring too.
Established agency buying another or opening an office
An SBA 7(a) or a bank term loan is usually cheapest for big projects, if you meet the citizenship rule and can wait. In the meantime, a line of credit covers payroll.
Agency that transports clients
Finance the vans with a vehicle loan and keep your working capital for daily operations. Don't mix the two in a single short-term loan.
Agency with private-pay clients
If some of your clients pay out of pocket or through long-term care insurance, your deposits are usually steadier, and that helps any application. Show that payer mix in a monthly summary: a funder sees less risk when you don't depend on a single public program.
Documents home health agencies are usually asked for
- Current state agency license and, if applicable, certifications or accreditations.
- Contracts or agreements with your main payers (Medicaid plans, insurers, veterans programs).
- Business bank statements for the last 3 to 6 months, complete and in PDF.
- Accounts receivable aging report by payer.
- Recent payroll register and number of active caregivers.
- Business tax returns, if you've been open a year or more.
- Owner ID, EIN and your LLC or corporation documents.
A practical tip: if your aging report shows a lot of claims older than 90 days, explain them before anyone asks. A funder understands a slow payer; it gets nervous when it looks like nobody is following up.
Mistakes that sink a fast-growing agency
- Financing denied claims. If a payer denies for billing or visit-verification errors, a loan only postpones the problem. Fix the process first.
- Taking on more clients than your cash can carry. Every new client adds payroll weeks before the first payment.
- Stacking advances. Two or three daily payments against the same cash flow can leave you short for Friday's payroll.
- Mixing accounts. If reimbursements land in your personal account, your business deposits look smaller.
- Signing without understanding. If you're more comfortable in Spanish, ask for the contract to be explained clause by clause in Spanish.
If your agency already has steady deposits and you need to cover payroll while payments arrive, you can apply with Merchant Fund Express: it's free and won't affect your credit. Medical practices face many of the same insurance collection challenges; see business loans for medical practices. Prefer Spanish? Leer en español.
Frequently asked questions
Can I get a loan for my home health agency if reimbursements are slow?
Yes, and it's the most common case. Funders that review sales and deposits, like our recommended funder, look at what comes into your account each month, not just your score. Have your bank statements, receivables aging report and payer contracts ready so they understand your collection cycle.
Which is better for payroll: a line of credit or factoring?
It depends on your portfolio. If your claims are clean and your payers pay on predictable timelines, factoring turns those receivables into cash. If you need flexibility to draw and repay, a line of credit is easier. Many agencies use a line for payroll and save factoring for growth spurts.
Can I use an SBA loan to buy a home health agency?
Yes, the 7(a) program can fund a business purchase, up to $5 million according to the SBA. It's among the cheapest options, but it's slow and paperwork-heavy. Since March 1, 2026, all direct and indirect owners must be U.S. citizens or nationals whose principal residence is in the U.S.
Do I need collateral to finance my agency?
Not always. Our recommended funder doesn't require collateral in most cases, because it bases its decision on your sales and deposits. Banks and the SBA may ask for collateral depending on the amount. With factoring, your own receivables serve as the backing.
What credit score do I need for a home health agency loan?
It varies by option. Our recommended funder considers credit from FICO 500, and better credit and cash flow usually bring better offers. Banks typically want higher scores. CDFIs and microloans tend to be more flexible but take longer.
Can I get home health agency financing with an ITIN?
With some funders, yes. Our recommended funder accepts applicants with an ITIN, no SSN needed, and reviews your agency's deposits. Many CDFIs also work with ITIN holders, so confirm with each one. SBA 7(a) loans aren't available unless every owner is a U.S. citizen or national. For questions about your status, talk to an immigration attorney.