Siena Lending Group earlier this month launched a health care finance practice that its leaders say will have a significant focus on the skilled nursing industry.
The asset-based lender established Siena Healthcare Finance to serve a variety of players in the space, including hospitals, home health agencies, hospice companies, and institutional pharmacies. But given the mercurial nature of skilled nursing billing cycles — as well as uncertain Medicare and Medicaid reimbursements — president Jennifer Sheasgreen says SNFs tend to account for the bulk of a health-focused asset-based lending practice’s business.
“It helps them bridge the gap between the billing and collection cycle,” Sheasgreen told SNN. “When they have to take on the burden of overhead, of payroll and other operating expenses, this provides them with the liquidity that they need to bridge that gap.”
Sheasgreen and business partner Edward Kauffman joined the Stamford, Conn.-based lender after collaborating on a string of health care finance startups, including Marquette Healthcare Finance, Doral Healthcare Finance, and Triumph Healthcare Finance, according to Siena; the latter firm was acquired by the Greenwich, Conn.-based CNH Finance last year.
Part of Siena’s interest in the health care space stems from its own recent purchase by an affiliate of Benefit Street Partners, which claims more than $3 billion of capital invested in health care companies.
“Expanding Siena’s industry coverage to include the health care sector helps to strengthen Siena’s product capabilities and presents a compelling channel for growth,” Richard Byrne, CEO of the Benefit Street affiliate BDCA, said in a statement announcing the new venture.
Siena’s new practice will target providers that need between $1 million and $30 million in working capital loans, typically borrowed against each facility’s accounts receivable. In Sheasgreen’s experience, SNF operators generally turn to asset-based loans to meet day-to-day financial obligations such as payroll and taxes, as well as to fund acquisitions in some cases.
The company will serve operators around the country with annual revenues of $5 million to $250 million.
“The skilled nursing industry always seems to be changing, whether it’s with acquisitions or divestitures, and new operators and new owners coming into the marketplace,” Kauffman, who will serve as the health care finance group’s managing director in charge of new business, told SNN.
In addition to Sheasgreen and Kauffman, Siena Healthcare Finance added Stephen Gaut as vice president of underwriting and Dan Carroll as vice president of portfolio management.