HospiceServe, Shawnee, Kan.
HospiceServe was successfully operating in Oklahoma and Kansas and wanted to expand operations to nearby states. It was currently operating in Kansas City, KS and expanding to the Missouri side of the Kansas City metro would allow the company to grow the customer base without needing to dramatically increase staff. Additionally, it was also interested in acquiring two hospice organizations in Colorado. HospiceServe wanted to capture these unique growth opportunities.
The start-up of new home hospice operations is a major financial undertaking that requires a significant injection of working capital. A company must obtain state and federal certifications that take 18-24 months. During that time, the company must perform services, but cannot bill for services until the certifications are received. At that point, it cannot bill retroactively for services performed, only future services. Even further, there was limited physical collateral to secure a loan.
Solution and Results
HospiceServe was referred to LendXP by a lender that recognized a specialized credit solution was needed. LendXP identified a new lender that saw the company’s excellent cash flow and was willing to make an SBA 7a loan, with the loan guarantee compensating for the lack of collateral. After receiving the loan proceeds, HospiceServe successfully expanded into Missouri and Colorado and continued to grow its operations exponentially.