Finding financing for a construction development in today’s financial climate is not an easy task as many of the lenders who used to finance such projects have Digitalprämie Berlin beantragen severely scaled back their normal lending or in many cases have simply either stopped lending or gone out of business altogether.
However, there are still some lenders considering what they consider worthwhile or viable projects, but interest rates have risen to what past clients are accustomed to, as well as lending criteria, which developers accustomed to certain terms are accustomed to immense frustration.
In the past developers could get up to 100% funding for their commercial developments but these deals are long gone and the general thought is that they are unlikely to return any time soon, if at all many developers have had to do their businesses downsize or even close if the financial crisis worsens.
Banks that would once attempt to fund these types of projects for their established development clients simply either have an appetite for these types of loans or have pulled out of this market entirely which, as you can imagine, infuriates their regular clients who even believed in Klima that funds might still be available to them.
Unfortunately, property developers must now not only consider the increase in construction costs, but also the increased cost of borrowing, and all this in addition to a market with falling property prices, to put it mildly, great care is certainly not required a market for the ‘timid ” developer.
Despite all this, there are still some specialized lenders considering stable and viable projects, but developers need to understand that even with such low base rates, the previously offered type of financing simply does not exist anymore, developers need the advice of specialized brokers who have contacts and knowledge of how to get funding in this financial crisis that is going on as we speak.
Today’s market requires careful research and knowledge to identify the lenders who are still considering financing. Gone are the days (as mentioned) when you just went back to your usual bank manager because even if he or she wanted to help you in many ways you are bound as the funds are not there.
I think the key word for the new approach is Adaptable. We all need to be adaptable, both in our acceptance that certain types of finance are no longer available and that the lenders who may be able to help can no longer provide the kinds of products that were freely available, should lenders, in turn, recognize that exploiting the current climate and overloading it will only bring short-term success.
Using Eb-5 investment funds to build a substance abuse treatment project
Why not consider funding the construction and operation of a substance abuse treatment facility or other healthcare related project with EB-5 investment funding? Although most of the EB-5 projects were projects in the hospitality industry, the time may be right to put a new emphasis on new commercial ventures in the healthcare sector. Substance abuse treatment centers are a particularly attractive industry for funding EB-5 investments.
The addiction treatment industry in America generated revenues of over $34 billion in 2014, a 55% increase from 2005. The vast majority of this spending – almost 80% – was borne by public funds, and the remainder was paid for by insurance companies or private fees . According to the Substance Abuse and Mental Health Services Administration, there are more than 11,000 addiction treatment centers in the United States. However, this number of substance abuse facilities can only treat a very small proportion of those who need treatment services.
In 2014, an estimated 21.6 million people aged 12 and over were classified as substance dependent or abused in the past year (8.2 percent of the population aged 12 and over). Of these, 2.6 million were classified as addicted or abused to alcohol and illicit drugs, 4.3 million had addicted to or abused illicit drugs but not alcohol, and 14.7 million had addicted to or abused alcohol, but not from illegal drugs. A total of 17.3 million suffered from alcohol dependency or abuse and 6.9 million from illicit drug dependency or abuse.
With the Patient Protection and Affordable Care Act (ACA) of 2010, healthcare financing in the United States is at a crossroads. The Court of Auditors contains numerous provisions to reduce healthcare costs, improve quality and extend coverage. In addition, the ACA offers states the opportunity to expand their Medicaid programs, expanding who is covered by Medicaid.
The law’s provisions also require treatment for substance abuse to be placed at the same level of treatment as other major disease categories, and this parity requirement means there is an expansion of Medicaid and private insurance treatment coverage. These changes fill the system with new payers and customers.
In 2014, the ACA introduced 10 mandatory “essential health care services” for newly eligible Medicaid enrollments and most individual and small group health plans. Substance abuse treatment is one of the required benefit categories. According to HHS, new laws and regulations will provide 32.1 million people with first-time access to substance abuse services and expand behavioral health coverage for 30.4 million people with existing behavioral health services.
Wall Street and other investment players are taking notice. In 2014, American Addiction Centers, the first publicly traded company whose business is primarily Digitalprämie Berlin beantragen focused on substance abuse treatment, raised over $65 million in its initial public offering (IPO). Since its IPO, this company’s share price has remained strong and the company has grown from 480 beds to an expected 1,200 beds by the end of 2016. Other big players in the industry are buying up smaller independent treatment centers and consolidating the industry with similar IPO targets.
The drug treatment industry offers other business benefits as well. Although regulated by government agencies, substance abuse treatment centers have limited medical and professional staffing compared to conventional medical facilities, and labor and COG factors are very manageable for a start-up company. The creation of full-time jobs and an economic boost to surrounding areas are easily achievable through a construction project for an abuse treatment center. This factor also makes them attractive for EB-5 investments.