Property Type:Nursing Home Loan Amount: $1,840,000 Loan:Permanent Financing and Working Capital
Transaction Summary: New York Commercial Lending provided permanent financing and working capital for a client to purchase an under performing nursing home in New England. Our client owned two small facilities and desired to use him turnaround experience to restore the operation to a profitable level. The borrower’s loan request was denied by ten banks because of their concerns with the industry, their inability to evaluate the upside potential with the operation and their concerns with underwriting the loan based on projections. Due to NYCL’s extensive knowledge in the industry, we were able to perform the following: (i) assess and document deficiencies for the existing operating, (ii) evaluate the strength of the projections and assumptions and (iii) factor in the impact that impending regulatory issues would have on the cash flow. As part of our analysis, we completed an extensive comparative analysis, which compared the projections against 20 other nursing properties. Our loan financed 80% of the acquisition price and a working capital to cover the cash flow shortfall during the transition period.