Huntington Bancshares is jumping into the medical banking business.
The $108 billion-asset Columbus, Ohio, company has brought aboard David Burch from Bank of America to lead the new team that will focus on providing financing for health care practices. It will primarily target firms with less than $20 million in yearly revenue that operate east of the Mississippi River.
“I began to observe an increase in players in the market a couple years after the recession started to settle, when banks were beginning to dig into their portfolios to understand their loss trends, and many started to discover resiliency in this area," Burch said in an email.
Huntington is joining a rush of small to midsize banks looking to fund medical equipment purchases, office remodeling and acquisitions of other practices. The bank will also seek to fund startups.
“Health care practice finance is an exciting and rapidly growing area of banking, as businesses often run by sole proprietors need tailored, expert financial advice and tools to succeed,” Huntington’s director of consumer and business banking, Andy Harmening, said in an announcement Thursday.
The bank intends to use loan guarantees from the Small Business Administration to back some of these loans.
Physician and dentist offices, along with veterinary clinics, receive more SBA loans than almost any other industry, totaling roughly $12 billion in loan approvals from 2008 to 2017, according to Windsor Advantage, which offers an SBA lending platform to banks. Huntington is one of the nation's largest SBA lenders.
