Evergreen Home Care Business Plan — Executive Summary

Evergreen Home Care, LLC is a non-medical home care and private-duty agency being established to serve seniors and adults with disabilities in the Greater…

Executive Summary

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Evergreen Home Care, LLC is a non-medical home care and private-duty agency being established to serve seniors and adults with disabilities in the Greater Columbus, Ohio metropolitan area. The Company provides personal care, assistance with activities of daily living, together with companion and homemaker services, and, from Year 2, skilled private-duty nursing, delivered in clients’ homes by a trained, screened and supervised caregiver workforce.

The business addresses one of the most durable demand trends in the U.S. economy. Roughly ten thousand Americans turn sixty-five every day; by 2030 about one in five will be of retirement age; and some 88% of seniors say they would prefer to age in their own homes rather than in a facility. Home care is the service that makes that preference possible. Demand is structural, recession-resistant and largely independent of the business cycle: people need help bathing, dressing and taking medication regardless of what markets do.

$900K

SBA 7(a) request

$1.2M

Total project

$7.27M

Year-5 revenue

18.8%

Year-5 EBITDA margin

Figure 1. The demand engine — the 85+ cohort, with the highest care needs, more than doubles over the horizon.

1.1 The request

Evergreen is seeking a $900,000 SBA 7(a) loan as part of a $1.2 million total project. The balance comprises a $150,000 owner equity injection from the members’ seasoned personal funds and a $150,000 revolving working-capital tranche within the 7(a) facility. Proceeds fund licensing and bonding, office buildout, scheduling and electronic visit verification technology, caregiver recruiting, marketing and, most importantly, the working-capital runway required to make payroll while receivables from insurers and Medicaid mature.

Figure 2. Revenue, EBITDA and margin expansion.

$ thousand	Year 1	Year 2	Year 3	Year 4	Year 5
Billable hours (000s)	23.5	64.7	113.5	163.8	213.8
Revenue	800	2200	3860	5570	7270
Cost of care	(560)	(1518)	(2624)	(3733)	(4824)
Gross profit	240	682	1236	1837	2446
Gross margin	30%	31%	32%	33%	33.6%
Operating expenses	(188)	(418)	(638)	(862)	(1079)
EBITDA	52	264	598	975	1367
EBITDA margin	6.5%	12%	15.5%	17.5%	18.8%

1.2 Why this is a fundable SBA business

Proven, recession-resistant demand. An aging population that overwhelmingly prefers home-based care; demand grows structurally for the next two decades irrespective of the economic cycle.
Low fixed-asset intensity. The loan funds working capital, licensing and organization, precisely what the 7(a) program is designed for, rather than real estate or heavy equipment.
Diversified payer mix. Private pay, long-term care insurance, Medicaid HCBS waiver and VA contracts, so that no single payer can threaten the agency’s survival.
Experienced, credentialed ownership. A healthcare operator with $18 million of prior agency P&L responsibility and a registered nurse with Director of Nursing experience, the character and capacity SBA lenders test for.
A wage position that supports retention. The modeled caregiver wage of $19.50 per hour sits roughly 29% above the national median of $15.14, which in an industry with ~79% turnover is a genuine and material operating advantage.

1.3 Independent findings in summary

Key findingFive findings, of which the first is decisive for an SBA credit

First, the stated Year-1 debt-service coverage of 1.28x cannot be reproduced from the Plan’s own figures: EBITDA of $52K against annual debt service of $143K is 0.36x, and the Plan’s own Year-1 cash flow shows a $91K deficit funded by a $115K working-capital draw. Second, the blended bill rate is held at exactly $34.00 for five years while modeled caregiver cost per hour falls 5.3%, in an industry the Plan itself identifies as facing wage inflation. Third, caregiver recruiting is funded at $713 to $1,133 per replacement hire against an industry benchmark of $2,600 to $5,000. Fourth, the balance sheet does not reconcile at close or Year 1, though it ties exactly in Years 3 and 5. Fifth, the stated break-even excludes debt service, the measure that actually matters to a lender. Each is quantified in Sections 15 through 18, and each is resolvable.

StrengthWhat testing confirmed: the reserve is genuinely adequate

The single most important structural question in a de novo home care agency is whether the business can make payroll through the ramp. Independent reconstruction of the Year-1 quarterly cash flow confirms that it can. The peak cumulative cash deficit is approximately $115K, occurring at the end of the third quarter, against $110K of initial operating reserves plus a $150K working-capital tranche, coverage of roughly 2.3 times. The ramp is reserve-funded by design, and the design works. That is a legitimate and fundable structure; it is simply not the same thing as 1.28x coverage, and the Plan should say so plainly.