Jeff Blankinship, president and CEO of Surgical Notes and co-founder of Surgical Capital, discusses alternatives for healthcare financing.
Surgical Capital is a new firm focused on turnkey captive formation and captive management for ambulatory surgery centers, surgical hospitals and other healthcare organizations and business owners.
Q: Why did you form Surgical Funds?
Jeff Blankinship: Several key Surgical Notes clients, including ASC physicians and owners and leaders of top management and development companies, expressed frustration with the difficulties experienced when attempting to access funding for de novo projects, operational capital and equipment purchases, and buying into new partnership opportunities. Surgical Funds was created to respond to these needs by eliminating the hassles associated with traditional commercial lending programs. We provide a service that offers competitive, flexible financing programs tailored to meet the unique needs of the healthcare industry.
Many physicians and organizations are upside down with their credit and debt-to-income ratios, have a low FICO score, or face other challenges that make it difficult to raise capital quickly. Surgical Funds delivers fast, customized solutions designed to meet these challenges and others that are unique to the healthcare industry.
Q: What services does the company provide?
JB: Surgical Funds provides multiple options for funding from various lending partners, financial institutions, national and local banks, family offices, private equity, and more. There are seldom two deals which are exactly the same. At Surgical Funds, we work to provide healthcare professionals with multiple, flexible financing options so they can secure the funding needed.
Q: What are some of the reasons healthcare professionals need financing?
JB: There are various reasons when healthcare professionals may want to consider a capital loan. Perhaps their facility is experiencing reimbursement delays due to the transition to ICD-10 or they would like to consolidate or re-finance commercial debt. In order to remain competitive in today’s healthcare industry, healthcare facilities need to upgrade their equipment or software periodically, and this requires capital. Surgical Funds also provides specialized healthcare financing for de novo development, real estate purchases, and practice acquisitions as well as physician loans for tax payments or to fund a healthcare captive insurance company.
Q: What are the biggest obstacles faced by healthcare professionals when seeking financing?
JB: One of the biggest obstacles faced when seeking capital is not knowing your options, which includes identifying available lenders. There are several ways to be creative when it comes to securing funding which are not in the typical wheelhouse of traditional banks. The first place a physician will typically to turn for financing is a local bank or national commercial lender. Inquiries at these institutions can result in the physician receiving a lowered credit rating, and the bank may ultimately turn down the physician's loan application for any number of reasons. Additionally, traditional lenders often have unexpected out-of-pocket fees and hard collateral requirements as well as long turnaround times. These are all avoided with Surgical Funds customized healthcare financing solutions.
Q: How can working with financiers help healthcare professionals reach their ultimate professional goals?
JB: Financiers, particularly those with healthcare expertise, understand the needs and desires of the deal at hand, which will often require creative and sometimes alternative financing to achieve the desired outcome. Growth through responsible financing helps healthcare entrepreneurs to reach their ultimate professional goals.
Q: What are the biggest misconceptions you see among healthcare professionals when taking on and managing debt?
JB: One of the biggest misconceptions is that while your practice or facility may gross a lot of money, this does not ensure that you will be financed. Many times the debt-to-income ratio is upside down. Couple that with a poor credit score/FICO and it will be difficult to secure favorable funding with traditional lenders.
Q: What are the smartest things you're seeing physician entrepreneurs do to manage and invest successfully?
JB: Due diligence and more due diligence! Healthcare entrepreneurs owe it to themselves to research all available physician loan programs and healthcare financing options available. In the long run, tailored solutions will be the best fit.