OptimumBank’s New Loan Program Could Create Franchise-Style Model for Smaller SNFs

At a time when some smaller, independent skilled nursing operators are struggling to remain viable businesses, Florida-based OptimumBank plans to enter the skilled nursing lending space, which may give some smaller distressed operators a chance to stay in the game for a little longer.

With occupancy still down for the skilled nursing sector and the last of the Provider Relief Fund on its way, OptimumBank Chairman Moishe Gubin thinks the bank’s new interest in senior health care is well timed.

“This is mainly for accounts receivable lending throughout the whole country,” he explained. “It’s mainly meant for smaller operators that are having a hard time finding a bank that is willing to lend smaller size loans.”

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Gubin said the bank wants to have a portfolio that is probably going to end up being between $30 million to $60 million worth of loans to start, with typical loans ranging between $500,000 and $2 million.

“You’re talking about a loan portfolio of 25 to 50 loans,” he said.

The first senior health care facility loan Optimum completed was in Rhode Island, the second loan was for a facility in Texas and the third will be for an Illinois operator.

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Gubin is also CEO of Strawberry Fields REIT, a growing player in the SNF space, and manager of health care consultancy Infinity Healthcare Management, LLC. He thinks the new loan program may present a kind of one-stop shop for operators, “almost like a franchise model.”

“Strawberry can buy an asset or own an asset, we could lease it to an operator that’s putting skin in the game and then Infinity can provide consulting and OptimumBank could provide financing,” he said.

Gubin said putting those three together could create a valuable product for operators around the country, particularly the smaller independent ones.

“One of the barriers of entry for the single operator is, as an example, they don’t have the ability to hire a nurse consultant. A mom and pop doesn’t have those resources,” he explained. “There is potentially a single owner/operator model here where I can, even though it’s different entities, have landlord, consulting, and banking under one franchise agreement and I’d be able to offer those services to [mom and pops] and be a resource for them.”

Thus far, Optimum has approved $30 million for the first tranche of loans, but Gubin believes that could just be the start.

He wants to see “controlled growth” before expanding.

“By the end of 2022 we probably will reach our first number and then probably double it or more than double it for the next year and we’ll grow out the department more and we’ll go from there,” he added.

Optimum also recently added Michael Blisko, CEO of Infinity Healthcare Management of Illinois and Infinity Healthcare of Indiana to its board of directors, and experienced commercial senior health care lender Michael Johnson to the lending team.

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