Opening an adult day care is more than just a business venture—it’s a mission-driven service that supports families, caregivers, and the aging population. But like any business that serves a vital community need, it requires funding, and lots of it.
Between licensing, staffing, facility setup, and operational expenses, the startup costs can range from $40,000 to over $300,000, depending on your location and service level. Fortunately, there are a variety of funding options available—grants, loans, reimbursements, and more.
In this comprehensive guide, we’ll explore how to get funding for an adult day care, even if you’re starting from scratch. Whether you’re just researching or ready to apply, this post has the roadmap you need.
What Is Adult Day Care—and Why It Matters
Before diving into funding, it helps to understand the core value proposition of adult day services.
Adult day care centers provide supervised care for seniors and adults with disabilities during the day. These programs often offer:
- Medical monitoring
- Meals and social interaction
- Personal care (bathing, grooming, etc.)
- Transportation
- Dementia care and cognitive activities
They’re a lifeline for working caregivers who want to keep loved ones at home, but need support during work hours. Adult day cares are often more affordable than assisted living, and can delay or prevent institutionalization. As the senior population grows, the demand for quality adult day services is skyrocketing—and funding is increasingly being directed toward community-based care.
1. Government Grants for Adult Day Care
Federal GrantsServices
Government grants can be powerful sources of startup or expansion capital. While these aren’t easy to secure, they can offer non-repayable funds to help get your center off the ground.
Where to Look:
- Grants.gov – Search for grants using terms like “elder care,” “aging services,” or “disability support.”
- Administration for Community Living (ACL) – Offers funding under the Older Americans Act (OAA) to support adult day health care services.
- Health Resources and Services Administration (HRSA) – Occasionally funds community health initiatives that may include day services.
State and Local Grants
Many states offer grant programs through departments of aging, health, or social services.
- Contact your state’s Department of Health and Human Services.
- Connect with your Area Agency on Aging (AAA)—they often distribute OAA funds.
- Some municipalities administer Community Development Block Grants (CDBG) for senior services.
What You’ll Need:
- A strong business plan
- Proof of community need (data + demographics)
- Compliance with licensing and safety regulations
- A clear service model
2. Medicaid Waivers and State Reimbursements
If your adult day care will serve Medicaid-eligible individuals, you may qualify for reimbursement under your state’s Home and Community-Based Services (HCBS) Waiver Programs.
How It Works:
- You apply to become a Medicaid-certified provider.
- Once approved, you can bill for eligible services like personal care, nursing, meals, or therapy.
- Some states offer per diem reimbursement (a fixed rate per person per day).
Examples:
- In California, the Community-Based Adult Services (CBAS) program funds adult day health care through Medicaid Managed Care.
- In New York, adult day services are covered under the Managed Long-Term Care (MLTC) program.
Check your state Medicaid website or talk to a Medicaid provider liaison to get started. While Medicare does not typically cover adult day care, dual-eligible clients (Medicare & Medicaid) can still benefit from state reimbursements.
3. SBA Loans and Alternative Financing
Sometimes, a loan is what gets you across the finish line. If you’re not eligible for grants or you need additional capital, consider small business financing.
SBA Loan Options:
- SBA 7(a) Loan: Best for buying property, working capital, or renovations.
- SBA Microloan: Loans up to $50,000, great for startups.
- CDC/504 Loan: Good for real estate or large equipment.
These loans are partially backed by the U.S. Small Business Administration, which reduces the lender’s risk—and improves your odds of approval.
Don’t Forget:
- You’ll need solid financials, a business plan, and possibly collateral.
- Expect a credit check and a detailed application process.
Community Development Financial Institutions (CDFIs)
If you’ve been turned down by traditional banks, look into CDFIs. These mission-driven lenders specialize in financing small businesses in underserved communities—including health and social care.
4. Private Investors and Strategic Partnerships
Adult day care can be attractive to angel investors or healthcare-focused venture funds, especially if you have a scalable model or serve an unmet need like dementia care or bilingual programs.
Who to Pitch:
- Angel investors in senior care or healthcare tech
- Impact investors interested in community wellness
- Hospitals or senior living communities seeking partners
- Nonprofits that want to contract services
Make sure your pitch highlights:
- Market need
- Differentiators (e.g. memory care, bilingual staff, therapy programs)
- Projected return (financial or social)
- Realistic timelines and risks
You can also form public-private partnerships with local governments or nonprofits to operate jointly-funded centers.
5. Grants from Foundations and Nonprofits
Several national and local foundations fund projects that support older adults, caregivers, or health equity. These grants are often competitive but can provide meaningful funding with fewer restrictions than federal grants.
Top Sources:
- AARP Foundation
- The Retirement Research Foundation
- Robert Wood Johnson Foundation
- MetLife Foundation
- Local community foundations
Where to Find These:
- Candid.org (Foundation Directory)
- GrantWatch
- Regional nonprofit resource centers
Tip: Partnering with a nonprofit or forming a nonprofit arm of your business can open doors to additional funding sources.
6. Serve Veterans? Tap Into VA Funding
If you intend to serve veterans, the Department of Veterans Affairs (VA) offers powerful funding options:
Programs to Explore:
- Veterans Aid & Attendance benefit – can cover adult day care for qualified veterans.
- Geriatric Extended Care – includes adult day health services.
- VA Community Care Network (CCN) – you can apply to be a contracted provider, allowing the VA to refer and pay for clients.
This can provide a steady client base and regular reimbursement.
7. Local Funding and Community Support
Don’t underestimate local funding sources and community engagement. These can include:
Opportunities:
- Economic Development Grants from your city or county
- Chambers of Commerce programs or competitions
- Fundraising events and community sponsorships
- Faith-based partnerships and church grants
- Local colleges with health programs that offer interns or workforce grants
These grassroots efforts may not fund your entire launch, but can significantly lower your upfront costs—and build goodwill.
How to Prepare for Funding Success
No matter what route you take, be prepared to show that your adult day care is viable, needed, and impactful.
Your Checklist:
- Business plan with 3–5 year projections
- Market analysis and demographic research
- Licenses and permits (varies by state)
- Staff recruitment and training plans
- Floor plan, zoning, and building compliance
- Program model (medical, social, dementia-specific?)
- Pricing model and reimbursement strategies
Want to strengthen your funding applications? Include letters of support from community leaders, hospitals, or families who support your mission.
Final Thoughts: Your Vision Is Fundable
Starting or growing an adult day care center isn’t easy—but it’s never been more important. With a rapidly aging population and an increasing push toward community-based care, your services are not only valuable—they’re essential.
While the funding landscape can feel overwhelming, the resources are out there. From government grants to private capital, from Medicaid waivers to VA contracts, you can piece together a sustainable, mission-driven funding strategy.
And remember: what you’re building isn’t just a business. It’s a safe, welcoming place where people are cared for, valued, and supported.
Need help starting an adult day care or getting funding? Prime Adult Community Care is here to help. Contact us for more information.
