Newsletter
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HOW TO CHOOSE A HEALTH CARE LENDER IN TODAY’S TURBULENT CREDIT MARKET
- by Mike Gervais
Given the current credit climate, many lenders are extremely conservative, and some are pulling out of specialty areas altogether, as they concentrate their efforts on rebounding from the mortgage crisis. With the capital markets drying up, there is a need in niche markets, such as health care, for companies that can concentrate on those individual sectors.
Just as lenders seek to qualify companies before they enter into business, those seeking financing should conduct some due diligence to make certain that lender is the right fit for their organization.
What to look for when seeking a financing partner:
Someone Willing To Lend Money
As simple as it may sound, the credit market instability has tested many companies who are no longer as willing to lend money as they once were. Look for a company with a good capital structure and the liquidity to fund. Companies that maintain a good balance sheet will remain largely unaffected and still thrive even when there is a crisis.
“The current market climate provides an excellent opportunity for Gemino. The turmoil
in the credit markets has caused many lenders to pull back and for even some
lenders to pull out of the lending market. We continue to execute on our plan
and have not changed our commitment and focus to healthcare providers
as evidenced by the transactions we closed in the first quarter.”
- Mike Gervais, Gemino Healthcare Finance CEO
An Understanding of Your Market
Look for someone with experience in your market. This criterion is especially true for health care where your lender should know what to expect when it comes to issues like reimbursement cycles. An experienced lender will structure the loan in a way that is flexible to the unique needs of the industry.
“As a health care company, you should look for a lender that understands the dynamics of the industry and has a lot of experience in health care.”
- Tom Greer of Fulcrum Ventures.
A Commitment to Your Market
Even beyond understanding your market, the right lender will be committed to your market. Traditional commercial lenders that have interests in several markets may be forced to exit when the situation becomes volatile. Look for stability and staying power in your partner.
“Find a partner with the same vision for the future of your company and
the ability to grow with you and offer support.”
- Chuck Byrge, head of investment banking at Harpeth Capital
Efficient Underwriting Process
Another benefit to finding a company that understands the industry is a quick turnaround from start to finish. This ensures little or no learning curve and existing processes to accommodate your needs.
“When we were interviewing partners, no one else had the grasp of health care,
and particularly home health, as Gemino did. We didn’t have to explain
our industry and the turnaround was quick from start to finish.”
- Wally Dant, president and CEO of SunCrest Healthcare.
Relationship Focused
The right partner will add value to the deal through its industry contacts. They can help expand your reach and take your company to the next level. They are a partner in the true sense of the word, and when you are ready to grow, they are there to support you and find ways that make sense for your company.
In the end, a good lender is a stable financial partner committed to your company and its growth. Rather than wavering with the changing tide of the credit market, a good financial partner will have a solid plan in place that can be executed no matter the climate
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GEMINO HELPS FUND LEUKEMIA RESEARCH
Gemino is proud to announce its support of the Leukemia Research Foundation as part of our ongoing commitment to support the health care communities our clients serve. Gemino recently made a donation to the Donald Davidson -- Alan Brin Memorial Chapter of the Foundation in the Chicago-area, in honor of our partners at Alden Management.
Founded in 1946, the mission of the Leukemia Research Foundation is “to conquer leukemia, lymphoma and myelodysplastic syndromes by funding research into their causes and cures, and to enrich the quality of life of those touched by these diseases.”
At last year’s annual fund-raising event, the Donald Davidson -- Alan Brin Memorial Chapter raised more than $160,000 for continued research. This year’s event will be held on May 4.
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