Acquisitions
Whether you are acquiring a business backed by real estate or an asset-based business that does not own the bricks and sticks, our funds can provide the necessary capital to close. For long-term care/senior housing companies, the funds can be used separately or in combination to provide the financing. For example, to the extent that a borrower needs 100% financing and wants one lender/investor, our funds provide all the capital needed.
The products can be prepaid and are therefore a good alternative to REIT financing, since the borrower is able to use the funds as a bridge and keep the upside. If the borrower has a relationship with a senior lender and/or has its own equity, our products work well with other lenders'/investors' products.
Finally, if there is assumable senior debt in place that is attractively priced or can not be prepaid, such as FHA insured debt or conduit debt, our mezzanine and equity funds can be used to layer on top of the existing senior debt.
For asset-based healthcare companies that are looking to acquire, our mezzanine and/or equity funds are excellent complements to A/R lenders or other senior-term lenders or as standalone financing. As standalone financing, our funds provide all of the capital necessary to complete the acquisition. This works particularly well when the eligible A/R base is too small for commercial A/R lenders or if senior financing is unavailable for the asset class. Our equity funds are redeemable at a stated IRR, so there is a way to repay our investment, while you capture the upside.
All funds can close quickly to meet your acquisition timetable. With our knowledgeable staff, we can deliver a commitment in under 30 days and in some cases can commit and close in that time period.
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Refinancing/Recapitalization
As with the acquisition scenarios, you can use our funds in a variety of combinations to refinance existing debt, provide cash out or buy out a partner.
For facility-backed businesses, we offer bridge and term financing. For example, a borrower can "Bridge to HUD" using our senior and mezzanine funds by leveraging the facility to 85% LTV or higher. The borrower can free up otherwise trapped equity (since HUD will not allow cash out financing), use the cash today and then refinance with HUD at a later date (usually within a year). The end result is that the borrower has monetized equity at a very inexpensive cost on a non-recourse basis (HUD terms). Another example is to use our mezzanine or equity funds to layer on top of existing debt to monetize equity.
For asset-based companies, we offer term financing as well as equity investments which allow for a refinancing of existing debt, recapitalization, working-capital financing, partnership buy-out or other corporate purposes.
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Leasehold Financing
Using either our mezzanine or equity funds, borrowers can use their leasehold interests as collateral to make acquisitions, renovate, construct or for other corporate purposes.
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Construction Financing
Both the mezzanine and equity funds can be used to finance construction and renovations. The funds allow a borrower to source a construction lender for the senior mortgage and can be used for pre-development needs, construction/renovation, as well as working capital for the start-up period.
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Accounts Receivable Financing
As a healthcare business owner, you need ways to keep up with growth and meeting your weekly cash needs. To add to the burden, many states' economies are becoming increasingly frail, which has led or could lead to slower payments on reimbursement. Further complicating the problem is the lack of reliable and consistent accounts receivable financing, since many banks and finance companies have pulled back from this type of product.
The accounts receivable financing program offered by Contemporary Healthcare Capital fills a need in today's tight capital markets by allowing a borrower to establish a line of credit secured by a long term care facility's or healthcare service business's accounts receivable. This program provides traditional accounts receivable financing terms with the added benefit of fast, experienced service as well as allowing the borrower access to other Contemporary Healthcare Capital products.
The program allows a borrower to finance eligible receivables (government reimbursement and commercial insurance payers) on a weekly basis. This program is designed to assist the small to mid-sized healthcare provider with receivable financing as from $1 million to $10 million. Unlike many accounts receivable lenders, ALL fees are spelled out on the initial application. Some of these lenders have found creative ways to make money without full disclosure or transparency.
The Contemporary Healthcare accounts receivable financing program is not a factoring arrangement. We do not purchase receivables, but rather finance them.
Our program offers the following benefits:
- Supplemental borrowing capacity - add another Contemporary product to your financing game plan for additional financing, without bringing in an equity partner.
- Increased cash flow and better liquidity - turn existing receivables into cash today to fund business growth.
- Expertise from industry leaders - Each customer works with a senior member of our team, including one assigned partner. Contemporary's team has been financing healthcare providers for over a decade, and continues to grow even during this economic climate. When a customer needs a quick answer, there aren't 5 credit committee meetings with members that are disengaged from the upfront process. At least one credit committee member meets each customer in person on the front end of all transactions.
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Other Creative Ideas
Our funds can be used in a variety of creative ways. We have financed captive insurance programs, the start-up of pharmacies, bought out venture capital partners, financed turnaround situations and funded accounts receivable needs. Please call to discuss the possibility of using our funds to help you meet your financing needs.
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