The health care commercial lending market is growing

written by Monica Korea On September 20, 2022


The health care commercial lending market is growing

As commercial loan transactions slow down a bit due to rising interest rates across financial institutions, health care commercial lending has become a growing market in South Florida thanks to the increase in the number of licensed physicians and the expanding Florida population.

City National Bank is adding a medical division within its bank lending capabilities in response to the significant increase in the volume of medical, dental and veterinary practices in Florida.

“This is a growing market for us. We feel that the opportunity to work with these doctors, dentists and veterinarians in their financial situation is important, not only to the bank but to the community,” said Ricardo Garbate, CEO of Private Banking at Citi National Bank.

He said commercial medical loan applications are expanding in the region. “The most we see are requests to gain practice [loans] For clinicians looking to grow their practice, either by purchasing an existing clinic or merging it with other practices. We are also seeing a lot of practicing physicians looking to start their own practice.”

The bank’s new division will also seek to cover medical practice financial planning, equipment financing and commercial real estate investments for private practice physicians, dentists, veterinarians, diagnostic centers and outpatient facilities.

Five experts join CNB’s private medical banking group, including Frank Nogarida, as Senior Vice President; Shaina Mejia and Gerson Sotolongo, Vice Presidents and Director of Private Banking Relations; Lynell Rendon, Vice President and Sales Officer, Treasury Department; and Adriel Martinez, as Senior Customer Service Specialist.

According to the 2021 Physician Workforce Report from Florida Health, the number of physicians providing care in Florida has increased 24.6% over the past 10 years, while the Florida population has increased by 13.5%.

“The number one factor that caused this growth is the large migration of people to Florida in general, the demand from high-income individuals who have settled in South Florida as well as the income growth that our market has seen for the local population,” El-Sayed said. Garbati. “Demand for qualified medical care … fueled growth in this area.”

The growth is evenly spread across South Florida, he added, “in large hospitals gaining talent from across the country, from large dental practices gaining access to smaller dental practices and physicians looking for the opportunity to go on their own and feel more comfortable where the economy is.” to the owner of the clinic.

In addition, other commercial loan markets have stabilized a bit. “Florida is still hot and showing growth, but transaction volumes have slowed down a bit,” he said. We attribute this to higher interest rates, but we still see a strong group of buyers [of commercial real estate] As people continue to move to South Florida and other areas.”

Commercial lending is exceeding pre-pandemic volumes, although it has stabilized in a range of industries due to high interest rates and inflation costs, said Pablo Pino, head of the South Florida market for commercial banking at TD Bank.

He said clients seeking business loans are looking for additional working capital. There is a demand for business loans on all front end equipment, mortgage loans and treasury management services. They buy equipment and are thinking of buying it [real estate]for rent” since the rents increased.

He said there is pent-up demand in the hospitality industry; Also in the distribution of food, consumer goods, nutrition, vitamins, aviation and automobile industries and auto parts distribution industries. “It appears that there is pent-up demand coming from the pandemic,” Mr. Pino said. “A lot of people were holding back.”

He added that manufacturing and distribution companies buy their raw materials in large quantities to ensure that they have the materials needed to produce them. “Bringing in larger numbers of inventory will require more working capital.”

Additionally, with a return to the traditional business of office setup, Mr. Pino said, companies are adding technology they have implemented during the pandemic to their core businesses.

“We expect it [the medical division at CNB] “The growth will continue, and the demand for the best healthcare will not change,” Mr. Garbate said. “Immigration to South Florida has been different than it has been in years past. People are enrolling their children in schools, getting more involved in the community, so we feel the medical side of the market will continue to be a growth area for years to come.”

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