The Respect Aged Care home will not close until all 16 residents have new accommodation, managing director Jason Binder said.

"We've already found suitable alternative accommodation for 10 of those residents," he said.

Some of the facility's 30 part-time staff members could find work at Respect's Cohuna Village, which is about 25 minutes up the road, Mr Binder said.

"We've also got 11 other aged care providers within 50km of Pyramid Hill. So we are hoping the sector won't lose those valuable skills.

"It's difficult to find high-quality aged care workers in regional areas and I'm hopeful staff at Pyramid Hill can find other providers if they can't be transferred to Cohuna."

More than half the residents and staff come from other parts of the state including Bendigo, Kerang, Cohuna and Swan Hill, Mr Binder said.

"That was one of the operational issues in running there. We were constantly scrapping to try to keep occupancy up by going to other communities and trying to get people to come to Pyramid Hill," he said.

"It had been running at a 65 per cent occupancy rate for the last six months and we don't get any extra income when we don't have the residents in there."

Respect's board made the "difficult decision" to close Pyramid Hill this week, Mr Binder said.

"Since we took it over it's lost more than $1.1 million. We've kept it going for the good of the Pyramid Hill community but there are increased cost pressures in residential aged care."

Costs have risen at double the rate of government funding increases over the past decade, Mr Binder said, which makes "absolutely no logical sense whatsoever".

A $5 billion government cash injection into the industry had not eased provider's costs, he said.

"What the government has done is increase funding as a whole because the the population is ageing.

"But in reality, on a per resident, per day basis, they have either had no increases or only half of what the cost increases are."

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