Asset based financing, or asset based lending, often receives disparaging comments from traditional lending institutions. A lot of the information available is misleading or written by…
Nursing homes are experiencing a rise in new residents. More people are aging, and nursing homes are in need of sustainable capital resources to provide the level of care their residents require. To that end, most nursing and managed care homes are wise to seek alternative solutions to traditional debt-based financing to expand operations while still delivering quality services.
Nursing Homes by the Numbers
There are very good reasons why nursing homes are making plans for growth and figuring out the logistics of expansion for the upcoming years. Statistically, one out of every eight Americans is of retirement age, and only one in ten has long-term insurance to help cover the costs of being in a retirement home. The healthcare costs for older people in the United States ranges between ten thousand and seventeen thousand dollars per year. Add to those amounts the cost of equipment, facilities, trained staff, and supplies, and it is easy to see why homes for the elderly want to avoid debt when seeking financial solutions. Added debt from loans can place a strain on cash flow for an industry that already has relatively tight profit margins.
A Better Alternative for Nursing Homes
Instead of going into debt, nursing and retirement homes are leveraging their assets to create sizable revolving lines of credit. Assets such as equipment, receivables, owned equipment, vehicles, and more have an inherent value. Asset based lines of credit tap into that value, offering the managed care industry a reliable and renewable source of capital without placing debt on the books. The line of credit can be used for anything, and once the balance is repaid, the amount of financing available is replenished. Having a revolving line of credit simply makes more sense than the finite amount of capital offered through traditional lenders.
Financing that Grows with Your Business
One of the biggest advantages of asset based lines of credit is that the amount of financing available actually grows with your nursing home. As more equipment is acquired or receivables increase, the credit limit also grows. As far as a financial strategy to place for rising demands, nursing homes should include asset based lines of credit when planning for the future.
CNH Finance specializes in asset based lines of credit for every facet of the healthcare industry. Contact our offices today to learn more about our program for reliable, affordable, and renewable sources of working capital.