Bridge Loans Create Opportunities in Healthcare Financing

New York, NY–The healthcare finance industry has consistently used bridge financing to acquire skilled nursing facilities (SNF) and there is no sign of that trend slowing down.

“There is a lot of capital available to fund these SNF deals,” says Adam Offman, Managing Director Healthcare Finance, Dwight Capital. “The capital is mainly coming from private and institutional firms plus family offices.”

With the help of bridge loans, these skilled nursing assets trades ownership in a timely manner.

“Financing SNF with bridge loans is [also] popular since it allows the seller to seek long-term HUD financing while acquiring and enhancing the property,” Offman tells GlobeSt.com.

Offman acknowledges the current skilled nursing environment is somewhat troubled right now but there are still more good opportunities out there than bad deals.

“A bad transaction occurs when an investor purchases a facility without realizing the potential that was anticipated at closing. Essentially the buyer is basically paying money to lose money,” says Offman.

Of course, a good transaction, when acquiring a SNF, doesn’t require a lot of renovations or operational changes and the bridge loan allows the investor to fund their transaction for the short term while anticipating their long-term HUD financing.

“The SNF industry is certainly going to improve,” Offman says. “Right now, even though the profit margins are pretty thin, we need this industry as there are a lot of seniors who use these facilities and who are in-need. Bridge financing is definitely still a viable option when purchasing these healthcare assets.”