An orthopedic surgeon, an ENT, and a pain management specialist walked into a bank…
How Live Oak Bank made it possible for them to relocate their ambulatory surgery center, upgrade to a state-of-the-art facility, double its capacity, AND put $350K back into their pockets.
When the three owners of Capitol Surgery Center, an aging facility in Salem, Oregon, decided that they needed a larger, more modern surgery center and a shorter commute, management consultant Rob McCarville approached Live Oak Bank for financing. McCarville, Principal of Medical Consulting Group, LLC, had experienced firsthand the advantages of working with a niche lender that understands the ASC business. He looked forward to working once more with Jon Voeller, a senior loan officer with Live Oak Bank’s Healthcare division.
Capitol would need approximately $3.5 million—$2.5 million for construction and at least $1 million for equipment and loan payoff—to make their plans a reality. They had already invested $350K in purchasing a new location in Albany, Oregon, and were ready to make improvements to the building’s shell.
McCarville credits Live Oak’s state-of-the-art online Portal with making it possible to upload documents and easily visualize the progress of the process.
“Live Oak’s streamlined communication and real-time updates made it possible to move from proposal to commitment letter in only two weeks, and from the commitment to closing in another 45 days or so,” McCarville recalls. “For a complex project of this type, that’s remarkably fast. Jumping through all of the hoops required by non-specialized lenders would have added months of frustration to that timeline because they don’t understand this business sector and often waste time by trying to make a square peg fit into a round hole. It helps that Live Oak’s teamwork structure makes it easier to keep the process moving—there’s no danger of getting trapped in an organizational ‘silo’ where communication tends to break down.”
“That doesn’t mean that there were no bumps or potholes along the way, but it’s what happens when you hit them that matters. Jon and his team stepped in to prevent them from becoming road blocks and sinkholes by waiving requirements that weren’t relevant to Capitol’s situation and ability to repay the loan.”
McCarville credits Live Oak Bank closing agent Kathleen Klima and her exceptional organizational skills with keeping the process on track as it approached the finish line. “She and the title agents working behind the scenes made it possible to close without undue delay, and that makes a big difference when the borrowers are anxious to complete the project and move into their new facility. The terms of the loan also put the $350K they had already invested in the project back into their pockets.”
After closing, a Live Oak construction manager efficiently handled payments to contractors and equipment vendors. “Live Oak was able to amortize those equipment purchases over a 25-year period,” says McCarville. “Conventional equipment loans are typically for only 5 to 7 years, and the much longer term will result in considerable savings in cash flow over the years. If needed, Live Oak structures packages that include both SBA and conventional loans. This type of flexibility is what I’ve come to expect from Live Oak Bank’s team. It’s their specialty.”
“It’s been a gratifying experience for these physician owners,” he adds. “They were able to upgrade to a state-of-the-art facility, they doubled their capacity to two ORs, and the loan process was smooth, efficient, and responsive to the unique needs of their enterprise. They receive one monthly statement that encompasses every element of their loan package and write just one check. I’m happy, too, because I know how much these advantageous financing terms will contribute to their ASC’s bottom line for years to come, and because they are in an excellent position to take advantage of cost-segregation tax savings in the future. Having the right lender on your team can make all the difference in how your story plays out.”