Smart Money: Have what it takes?

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William C. Fisher
William C. Fisher
Much of the current news talk is about the “new normal” taking place, retail sales slowly increasing, the housing market selling off excess inventory and the changing capital markets. This news is encouraging many senior living providers to get back into the capital markets.

Interest rate trends and financing tools are providing a more favorable climate to access capital. Credit concerns have experienced some easing, although defaults continue to affect the expectations and requirements of lenders.

This writer has experienced firsthand (and repeatedly heard from others) the ongoing challenges of managing through such difficult financial conditions. Every conversation about access to capital includes how strict the criteria are from lenders and how many organizations might not have what it takes to continue.

Some nonprofits continue to struggle to emerge from the economic storm and are seeking affiliations to continue their mission.

A for-profit developer in Indiana has had to align itself with a strong SNF operator to get bank loans. A Lutheran organization in Washington built an assisted living facility years ago and wants to add 40 units. More than a year has passed while negotiations to borrow have stalled. This organization has even approached the national church for financial help, with no response thus far.

Another example: An experienced senior living operator in Florida buys prime real estate near the peak in value, develops architectural plans, gets zoning and entitlements for age 55-plus apartment living and then runs out of cash. Several years have passed as funds are sought, to no avail. Foreclosure is possible.

So I ask the question again, “Does your management team and project have what it takes to continue with the mission?” Now is as good a time as ever to discuss financing with your financial advisor, investment banker or even your peers. Prepare your organization to be a survivor.

William C. Fisher is president of Investment Advisory Group LLC, a business development company partnering with some of America's leading financial companies to provide independent financial services to nonprofit organizations.

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