The Borrower is a 29-bed, 68,320 square feet, acute care hospital with emergency room and related health care facilities, located on 2.42 acres of land that it owns, which is located within a larger, approximately 40-acre medical park development.

The hospital was a replacement of a 50-year-old hospital in a rural community of Alabama.

There has been tremendous support for the hospital from the City and County governments and the local citizens. The Borrower’s presence in the community dramatically expanded healthcare services in a severely distressed non-metropolitan census tract that lost its previous hospital in2011, leaving the region’s residents to travel as far as 100 miles for healthcare services.

The Borrower commenced operations in January 2020 by hiring and training staff, having hired 67 employees by January 18, 2020. They began taking patients in March to a flood of activity and then the response to the COVID-19 pandemic by government authorities quickly stifled the activity.

The project consists of refinancing existing debt and providing much-needed working

capital. The loan is structured with a 12-month interest-only payment period and an interest reserve, funded by loan proceeds, in an amount equal to the 12 interest-only payments at current interest rates.

The Borrower is also applying for a loan under the USDA’s Business & Industry Guaranteed loan program. As a safety measure, the loan also includes a payment reserve in an amount equal to 12 months of principal and interest payments at current interest rates. The interest rate on the Loan is also fixed for the first 5 years.

This structure should allow the Borrower the “runway” it needs to overcome setbacks caused by the effects of COVID-19. The Borrower can essentially operate for a year without worrying about making payments on the Loan, since the payments are covered in the reserve, and will have ample working capital available to pay other expenses. Management of the Borrower feels that this is more than sufficient to allow them to thrive and prosper.

Loan ID 0129
DSCR 3.91
LTV 70.24
Note Rate 6.00
Property Location AL
NAICS 622110
Guaranty Type USDA
Loan Term 22 yrs
Rate type Var
Note date N/A
Maturity date N/A
Participation Availability Amount $7,210,000
Minimum Participation Amount $250,000
Original Loan Amount $20,600,000
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