Healthcare Mergers: Making a Smooth Transition

February 14, 2019 by CNH Finance, LP in category “Financing”

Mergers and acquisitions in the healthcare industry are not uncommon. In many cases, healthcare mergers provide wider coverage and quality services to a larger population in need of medial care and assistance. However, healthcare mergers are simultaneously complex and time-sensitive transactions, and need to be handled delicately.

Assessing Resources and Capital in Healthcare Mergers

Existing resources and clients are typically the impetus for most mergers in the healthcare industry. Staff, supplies, equipment, existing receivables, vendor accounts, and even facilities need to be assessed during a merger to decide what needs to be kept, what creates redundancies, and what is no longer necessary. Additionally, ample working capital is necessary at every step of a merger to ensure facilities can can remain functioning and conducting business during the transition. The longer a merger takes to complete, the more it costs across the board.

Leveraging Resources for Capital

Healthcare mergers also offer up opportunities to access financing without having to rely on debt-based loans. As we discussed above, healthcare facilities typically have equipment, receivables, and other owned assets. Those assets have a value which can be used to create a revolving line of credit without forcing a divestiture. This asset based line of credit does not place debt on the balance sheet, nor does it negatively impact credit ratings. The renewable source of working capital can provide the funds necessary to make a smooth and efficient transition during a merger. Any added equipment, receivables, and other assets gained from a merger can be used to increase the amount of funding available. Asset based lines of credit are the only source of financing that grows with your healthcare facility, thereby promoting long-term success.

Asset Based Solutions for the Healthcare Industry

At CNH Finance, we specialize in asset based solutions tailored to the needs of the healthcare industry. Our team performs a deep analysis of assets to get healthcare facilities the most value for what they own, and we take more into account than traditional lenders. We can provide asset based solutions for healthcare mergers, acquisitions, something as simple as capital for purchasing supplies, and anything in between. Contact CNH Finance today and get the capital you need without the burden and restrictions of debt-based loans.

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