Navigating today’s challenges for healthcare businesses

At CIBC, we understand the challenges operators face today and we’re built to help them address their most pressing needs.

Reimbursement risk

Medicaid rules and reimbursement rates vary widely by state and continue to evolve at the federal level due to significant legislative changes. While rates are on an upward trend, the complexity remains daunting.

Labor and staffing shortages

Many experienced workers left the industry after the stress of the COVID-19 pandemic, leaving healthcare businesses struggling to fill roles. Higher wages are often required to attract and retain quality staff.

Inflation

It’s not just labor straining budgets. Healthcare businesses are paying more for utilities, supplies and medications as inflation remains high and supply shortages are more common due to tariffs.

Litigation

When caring for elderly residents in group settings, accidents are unfortunately likely to happen. Even when not at fault, operators can face lawsuits. What matters is having sound policies and procedures in place ahead of time, as well as a financial partner who understands these realities to assist.

Our team recognizes the dynamics within this industry and will work with you to assess your situation and craft financing solutions that meet your needs, rather than offering one-size-fits-all loans.

CIBC offers two main financing options for facility operators:

• Working capital loans based on your reimbursements, providing short-term liquidity to cover expenses when cash flow is tight. 
• Asset-backed loans tied to real estate or buildings, giving operators the leverage to improve and acquire facilities as well as refinance existing debt.

When working with CIBC for financing, speed is a significant advantage. While HUD loans may take 6 to 9 months to close, CIBC healthcare banking loans typically close within 90 days. That speed enables operators to move quickly on everything from stabilizing operations, before conditions worsen to acquiring a new facility ahead of a competitor’s bid. 

Our clients often use CIBC loans as a bridge, later refinancing with HUD once eligible. That pathway allows them to unlock opportunities more quickly than if they had to rely solely on government resources.

Financing can also position your organization for long-term success. Scale matters in the healthcare industry.

“Once an operator grows to 5 to 10 buildings, they can afford senior management teams, attract stronger staff and improve operations across the board,” says Peter Kane, co-head of Healthcare at CIBC. CIBC’s financing helps clients reach that level as soon as possible.

Many operators also hold dated purchase options for their facilities, allowing them to buy ownership in the future. They build up value by making additional facility improvements.

However, that equity remains locked up because operators don’t have the capital to exercise their purchase options. CIBC provides you with the resources to capitalize on these opportunities and reap the benefits of your hard work.

CIBC’s healthcare banking division delivers more than financing. The team proactively monitors client performance. While other lenders may simply track revenue and expenses, we delve deeper into the assets on your balance sheet, seeking ways to derive more value and identify issues that may be overlooked. 

“We constantly monitor the assets in our loan portfolios,” explains Kane. “If we notice an underperformer, we’ll call that out and work together with the borrower as they come up with their plans to get things back on track.” 

Your success is our success, especially considering how many of our healthcare loans are asset-backed. It’s in our best interest for your organization to derive the highest value.

The CIBC healthcare banking team has been together for over 23 years, a continuity that is unheard of among other lenders. We have guided clients through major market swings before and are ready for what comes next.

To learn more about how we can help your healthcare business thrive and seize opportunities, even in today’s challenging conditions, visit our Healthcare banking page.