Opening an addiction treatment center is a great way to launch a profitable business while making a difference in the community. Funding a rehab facility is possible through certain avenues, but attention to several factors is vital, such as a strong business plan or campaign. Traditionally, treatment centers receive funding through Federal substance abuse block grants, Medicaid reimbursements, and State general funds. New options are becoming available to support the large numbers of people needing treatment through rehab facilities. 

Challenges with Funding a Rehab Center

Treatment centers or rehab facilities can be expensive, but fortunately, new funding possibilities exist. In the past, building a residential treatment center could be a multi-million dollar investment. Developers with an insight into these facilities are offering hope for people who want to help those who need this type of treatment and new methods of funding a rehab facility. Professional healthcare consultants can suggest many helpful insights when creating a business plan. 

Treatment Centers Can Be Expensive

Many costs are associated with funding a rehab facility. It is crucial to run a professional financial analysis to determine the profitability of the planned healthcare enterprise. Residential treatment centers are typically multi-million dollar projects when building a new facility. Fortunately, there are ways to decrease costs, which a professional consultant can advise on. 

The following costs are a consideration when opening a treatment center:

• The facility or building: Will you build, rent, buy, and renovate?
• Staffing: Clinical Director, clinical and medical staff, clerical and administrative staff, case workers, and janitorial staff
• Licensures and accreditations: Behavioral health license requires the establishment of policies and procedures. Some facilities obtain accreditation from 3rd-party agencies like CARF and The Joint Commission.
• Legal Consultations: The business must be legally sound and meet federal and state requirements.
• Programming and services: Will you provide inpatient, outpatient, or a combination of services?
• Marketing and research: Website, marketing research, and healthcare consultants can be invaluable to any facility.

The Facility Location Is Extremely Important

Running a marketing analysis to determine the best location for successful revenue before funding a rehab facility is mandatory. Deciding on a site will affect rental costs through the current market rates if renting a present facility. While substance use treatment is needed, finding a central or accessible location is important for viability. Researching how many rehab facilities would be competition is essential. 

Financing, Funding, and Grants

Opening a treatment center or rehab facility appears overwhelming from every angle. Pinpointing all pertinent factors pre-funding can help to guide the pathway to finding funding. Once a solid business plan is available, it is a tool for acquiring financing for a successful and worthwhile venture. The following suggestions for a solid financial base for the business may be helpful. 

Banks

Banks are always an option for funding a rehab facility. Still, traditional banks and lenders tend to have higher interest rates and are not guaranteed by any governmental agencies. However, those who do not qualify for an SBA loan may find bank funding. New business start-ups should shop around to find the loan’s best terms and interest rates. Credit unions and small community banks may be more favorable toward a new business.

Small Business Association

The Small Business Administration (SBA) supports small businesses (less than five hundred employees) with special resources for healthcare facilities. The SBA offers loans to small business owners; the loan carries a guarantee by the SBA, protecting lenders in cases of default. SBA might be a good option for funding a rehab facility because these agencies often have lower interest rates. Qualifying for a small business association loan may be challenging for some as they require a good credit rating and a professionally detailed business plan. 

Private Equity Groups

Private equity groups are excellent sources for small business start-ups and rehab facility funding. Either groups or individuals allow for the review of a business plan or campaign describing a business venture needing capital. Crowdfunding opportunities involve the use of social media. Angel Investors are investors willing to take a risk but may require a piece of the action. 

• Crowdfunding is an online platform to advocate for large numbers of people with money to donate to small business start-ups. A business campaign is designed to spread the word online about the intentions of the new start-up. Funding a rehab facility is a possibility with crowdfunding. Making a difference in society for those struggling with addiction is a compelling reason for this campaign. 
• Angel investors invest in early-stage companies in exchange for equity in the business. While they have a high-risk tolerance, their motivation comes from the potential for big investment returns A solid business plan is necessary, but funding a rehab facility could be facilitated by giving up a percentage of the ownership. These investors may be more difficult to locate than crowdfunding.
• Venture capitalists or private equity firms are other options for funding a rehab facility start-up, but again, equity in the business is the exchange for the investment of large sums of money. Be sure the investor will have a significant impact on the development and growth of the business. A strong business plan and a solid pitch are required to win the investor over. 
• Fundkite is exclusively for rehabilitation center start-ups. With many options available for treatment centers, Fundkite does not charge interest on their loans, which are transparent terms. Instead, they ask for a percentage of revenue to repay the loan. Funding a rehab facility is in their wheelhouse, so visit their website for more information. 

Federal grants are popular options for healthcare start-ups, especially funding a rehab facility, but grant writing is a lengthy and detailed process. SAMHSA offers grants, there are federal block grants, and Grantify is an online platform with helpful software to make the grant process easier. Government funding for drug and alcohol centers is another option to study. These are all viable options; Google offers links for each opportunity. 

Explore the Possibilities of Opening a Rehab Facility

If you or a group of potential investors are interested in opening a rehab facility, you’ve chosen a great location. Bloom Healthcare Consulting in South Florida can assist with the basic fundamental planning needs, projections, analyses, and other requirements. Experienced healthcare consultants can answer the questions you may have and direct the process for the best possible outcomes.

Contact our offices to schedule a phone call today.