Pathway Healthcare, LLC
When Pathway Healthcare sought to open a rehabilitation hospital in 2010, they faced the challenge of licensure and accreditation. Before that came the lengthy process of securing an SBA loan. Through the help of the Louisiana Small Business Development Center at Louisiana State University Shreveport, they were able to whittle that process down from a year to a little less than a couple of months.
Pathway Healthcare Challenges:
- Obtain an SBA loan to finance the construction of a 24-bed rehabilitation hospital.
- Go through the process of accreditation and licensure to accept Medicaid and Medicare patients.
- Used expertise and experience to help walk Pathway through the SBA loan application process.
- Provided a list of statements and information that SBA would be looking for.
- Saved up to a year in the loan application process.
- Secured SBA loan
- Created 50 new jobs
- Served more than 400 patients
Pathway Healthcare, LLC
Opened in June 2010, Pathway Rehabilitation Hospital is a 24-bed hospital that helps patients with everything from hip fractures and osteoarthritis to spinal cord injuries. Administrators spent more than a year of planning before opening the hospital and say assistance from the Louisiana Small Business Development Center was critical in helping expedite their SBA Loan.
Pathway Chief Financial Officer Lee McLendon said the hospital was built in 17,000 square feet of leased space at Cornerstone Hospital, a long term acute care hospital in Bossier City. The idea was that the two hospitals could complement each other on the same campus. Along with extensive remodeling to the facility, McLendon said there was a long process of licensure and accreditation from the state.
Obtaining the Small Business Administration Loan would prove to be one of the most challenging and time-consuming parts of the process. They visited the Louisiana Small Business Development Center at LSU Shreveport at the advice of Citizens National Bank. Consultant Bob Boling helped Pathway work through the loan process by fine-tuning their financial projections and business plan. Through his years of experience with SBA loans, Boling knew exactly what they were looking for and provided McLendon a “laundry list” of information to provide.
“We likely could have done the SBA loan on our own, but it would have taken us three times as long. It saved us almost a year,” said McLendon.
Careful financial planning and help from the loan was critical. For a hospital like Pathway, Medicare and Medicaid patients can constitute 85% of the business. To be certified, the hospital first had to care for and clear 20 patients, all on their own dime.
“They had a dollar value of over $300,000. We never got paid for that and never will, it came out of our pocket and you need the funds to sustain the business during that time,” said McLendon.
The Louisiana Small Business Development Center helped Pathway better project those revenues and cash flows in the early stages of planning. Pathway Healthcare, LLC has created approximately 50 jobs in Bossier City and has since served more than 400 patients. While Pathway spent most of 2010 building itself and its clientele, McLendon said it started turning a profit in 2011.