Buying or Selling a Home Care Agency: Valuation, Financing and Change of Ownership
How home care agencies are valued, how buyers finance a purchase with SBA loans, and the license and Medicaid steps a change of ownership triggers.
By Caregiver Scheduling Team ·
Short answer. Home care agencies usually sell for a multiple of their adjusted earnings. The multiple depends on size, payer mix, caregiver retention and how much the business depends on the owner. Buyers often finance with an SBA 7(a) loan, which can go up to $5 million (SBA). Licenses and Medicaid enrollments usually don’t transfer automatically.
General information, not legal advice. Rules change and depend on your facts. Confirm with the official source linked in each section or a healthcare attorney or CPA before acting.
How is a home care agency valued?
Smaller agencies are usually priced on seller’s discretionary earnings (SDE), meaning profit plus the owner’s pay and one-time costs. Larger ones are priced on EBITDA. Buyers pay more for:
- Steady revenue across many clients, with no client over about 10% of revenue
- A payer mix they want (some buyers prefer private pay, others Medicaid volume)
- Caregiver retention and a stable office team
- Clean books, documented policies, current licenses and clean surveys
- Systems that don’t depend on the owner
We don’t publish multiples because they change with interest rates and deal size. Ask a broker for recent comparable sales in your state.
How do buyers finance a purchase?
- SBA 7(a) loans, up to $5 million, are common for business acquisitions (SBA)
- Seller notes, where the seller finances part of the price
- Earn-outs tied to revenue retained after closing
What does a change of ownership trigger?
| Item | What usually happens |
|---|---|
| State home care license | Often doesn’t transfer. Many states require a new application or prior notice. Check the licensing page for your state |
| Medicaid provider enrollment | Report the change to the state. A new enrollment may be required |
| MCO and VA contracts | Assignment usually needs the payer’s consent |
| Medicare home health | Special rules, including the 36-month rule limiting sale of billing privileges (42 CFR 424.550) |
| Employees | Rehire, new I-9s for some deal types, and payroll account changes |
| Client agreements | Notice to clients; reassignment of service agreements |
Asset purchase or stock purchase?
In an asset purchase, the buyer picks what it takes and usually leaves past liabilities behind, but licenses and enrollments are more likely to need new applications. In a stock purchase, the entity stays the same, so some enrollments may continue, but the buyer inherits past liabilities such as overpayments and wage claims. Due diligence matters more in a stock deal.
Due diligence checklist
- Three years of financials and tax returns
- Payer mix and revenue by client
- Caregiver turnover and overtime rates
- Wage-and-hour compliance: overtime, travel time, live-in pay
- Medicaid audit history and any open recoupments
- Exclusion screening records
- License, survey and complaint history
- Software contracts and data export rights
FAQ
Can I buy an agency to get a license faster? Sometimes, but many states treat a change of ownership like a new license. Ask the state first.
Does my scheduling data go with the sale? Check your software contract’s export and transfer terms.
Should I use a broker? Many sellers do. Get a quality-of-earnings review before you list.
Change log
- 2026-11-06 Page published, checked against the primary sources linked above.
Living page. Last updated November 6, 2026.