[Sponsored] 4 Benefits an Experienced Lender Brings to Senior Housing Finance

Senior housing has long been viewed as a
growth sector due to the wave of aging Americans expected to move into senior
living communities in the coming decades.

Yet when it comes to financing new development
and expansion, not all lenders are created equal. Some lenders have been
attracted to the space by favorable demographics, yet they lack the experience
that is so critical in senior housing and care. And particularly during
uncertain markets and economic downturns, such as that fueled by the 2020 COVID
pandemic, it’s essential for those seeking financing to work with a lender that
is expert in the market.

“Our knowledge of the industry and sector,
coupled with our strong understanding of banking products, allows our team to
develop financing plans or treasury products around the needs of the operators
and investors,” says James Vincenti, senior vice president/department head

Commercial Banking – Healthcare for Investors
Bank.

Here are some of the key benefits an
experienced senior housing finance company offers owners and operators.

A team
of individuals with extensive healthcare lending experience

Investors Bank has collective experience of
roughly 75 years in lending and advising specific to the health care sector
with backgrounds spanning health care lending, commercial lending, leveraged
finance, not-for-profit and treasury management services. The 9-member Health
Care Lending Commercial Banking team was established in 2012 and has since
generated over $1 billion in loans, a majority of which have been with senior
housing borrowers.

Serving both for-profit and not-for-profit
entities, the team has a national presence and works with borrowers that have
operations in multiple states.

“Most of our bankers have worked with other
financial institutions including some of the nation’s largest commercial and
corporate banks, investment banking, private equity and regional banks,”
Vincenti says.

Understanding
of and appreciation for health care and senior housing needs

Specific industry experience can be a critical
differentiator in any senior housing finance scenario, as there are many unique
components of senior housing such as payor mix, regulatory considerations and
safety requirements.

“We have a strong understanding of the current
market environment, including reimbursement status through Medicare and state
Medicaid programs; payor mix of patients and challenges, and most recently
COVID,” Vincenti says. “We understand senior housing financial statements and
profitability of the business and can work with operators due to our strong knowledge
of the sector.”

Among the other issues specific to senior
living providers that an experienced industry lender can address are clinical
and non-clinical needs, occupancy trends, property types from assisted living
to skilled nursing and transitional processes involved when a merger or
acquisition takes place.

Senior
living and senior facilities operations knowledge

In addition to senior housing financial
experience, a lender’s intimate knowledge of senior living operations can be
critical to success. The pandemic’s impact on the industry, for example, has
very specific challenges to operations and finance that an outsider likely will
not fully grasp.

“In light of the current environment, COVID
and its impact on senior housing has been a tremendous challenge,” Vincenti says.
“Although we believe that a vaccine is on the horizon, we have maneuvered our
clients through the issues with adjustments made via, PPP and in some cases,
additional liquidity.”

Reimbursements and the changing reimbursement
landscape among Medicare- and Medicaid- certified service providers is another
element that has strong bearing on an operator’s financial performance, as are
other factors such as new competition inside and outside the industry, referral
sources and clinical changes, among others.

Expertise
in recommending and customizing appropriate financial products

But perhaps the most important areas where an
experienced lender can work with senior housing owners and operators seeking
financing is in terms of product offerings. Knowing which financial products
are a right-fit for industry players is a key benefit Investors Bank provides.
Term loans can be used for real estate, acquisitions and equipment purchases,
with tax exempt products in the form of direct purchase and loan programs —
customized based on need.

Likewise, revolving and working capital can be
used in scenarios where operators are transitioning facilities and may have a
need for working capital related to projects and expenses. Finally, depository
services include operating and reserve accounts, mobile banking and other
services, comprising a full-service approach for senior housing banking
customers.

Whatever the need for finance, Investors Bank
is prepared to assist with a suite of products and services geared toward
senior housing owners and operators including:

• Commercial lines of credit with variable rates
• Commercial term loans with flexible terms up to 10 years and competitive interest rates
  (bridge to HUD financing is also available)
• Treasury management solutions that simplify control over cash flow

“We are committed to expanding our geographic
footprint by diversifying our portfolio in multiple geographic regions
throughout the U.S.,” Vincenti says. “We started this growth path in 2020 and
will continue on this path going forward.”

To learn more about Investors Bank and its Health Care Lending Commercial Banking team, visit Investorsbank.com/SLL.

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