If you are interested in starting a group home, two aspects of your business will help determine where you can get startup funding: whether your business will be run as a nonprofit or not, and the target market for your group home. Some group homes are for mentally or physically challenged adults or children; some are for the elderly; and some are for people with addictions, or recent parolees. There are more grants available to nonprofits than for-profit businesses.

Microfinancing

Accion USA is the largest provider of microloans to businesses in the U.S. The lending organization offers business loans up to $50,000 and specializes in working with "small business owners who cannot borrow from the bank due to business type, a short length of time in business, or an insufficient credit history." Collateral and another repayment source, besides the business, are required. Applications can be made online, via fax or in person.

Peer-to-Peer Lending

In peer-to-peer lending, all transactions are done online, and borrowers and lenders interact anonymously. Lending Club, one of the largest p2p lenders, collects an administrative fee of between 2 and 5 percent to screen applicants and issue loans. Applying is free and relatively easy. Applicants establish online profiles, then supply financial information and reasons for borrowing. Business startups are acceptable. Potential investors can review profiles and offer funding to any applicants they choose, at whatever amount they decide on. Only about 10 percent of applicants are currently receiving funding, but those who do usually have money deposited into their bank accounts within 10 days.

Private Foundations

Many private foundations provide funding for group homes, based either on the specific market served or the geographic location. For example, the Burlington Northern Santa Fe Foundation has been BNSF Railway’s main vehicle for charitable giving since 1996. One of its stated areas of giving is "programs that address chemical dependency treatment and prevention, spouse and child abuse, women's and children's aid and transitional shelters." Applicants must be 501c3 nonprofits and exist in or serve a community near one of BNSF's rail lines.

State and Federal Government

If your group home happens to be located in a rural area, you can apply for a Community Facilities loan or grant. The program is made available through the U.S. Department of Agriculture and funds all types of public facilities, including assisted-living facilities, group homes, mental health clinics and shelters. Funds are made available to each state based upon its rural population totals, poverty level and rural unemployment percentages. Grants are limited to 75 percent of project cost, with no matching funds requirements. Besides states, municipalities and U.S. territories, funding is available to a variety of public or private nonprofit organizations. Direct loans range from $5,000 to $9,000,000. Guaranteed loans range from $26,000 to $20,000,000, and grants range from $300 to $445,500.