Inspira Financial Inc. Releases Quarterly Results; Update on Loan Book and Operations
WALNUT CREEK, CALIFORNIA–(Marketwired – Oct 29, 2015) – Inspira Financial Inc. (TSX VENTURE:LND) (“Inspira”) today announced results from the quarter ending August 31st, 2015.
After securing more than $25 million in public equity financing, as well as debt financing privately and through the issuance of public debentures, Inspira launched full operations in February 2015 into the fragmented marketplace of small companies in the large and growing market for alternative financial services offered to healthcare providers and their patients across the United States.
Inspira’s initial product offering addresses the needs of a $1 trillion market of small healthcare providers across the U.S. Inspira currently offers several types of financing options for small businesses in the industry, including:
- 3-year revolving lines of credit and loans ranging from $250,000 to $5 million with total interest and fees ranging from 12%-18%;
- 90-day to 1-year revolving lines of credit and loans ranging from $5 million to $15 million with interest rates ranging from 8%-14%; and
- 90-day to 1-year introductory lines of credit for up to $250,000 often used to initiate a relationship with a customer before moving to a larger and longer term line of credit.
Financial and Business Highlights:
- End of September 2015 loan book in excess $50 million, as compared to $35 million at the end of May 2015.
- Generated annualized (interest and fee) revenue of approximately $4 million in August 2015.
- Generated operational profit of approximately $465,000, not including one-time origination fees for the quarter ending August 31, 2015.
- Created a proprietary online tool for credit line applications, due diligence and loan management.
- Established several origination channels, ranging in cost (in one-time fees) from 0.25% to 1.5% of the initial loan.
- Responded to over 200 inquiries and applications for loans and lines of credit since full launch in February 2015.
- Management reasserts its goal of a $500 million loan book with no further equity financings, assuming fully- diluted capitalization and 80% leverage.
“Since we finalized our financing we have been able to ramp our loan book quickly with a very small, but focused, team,” said David Costine, CEO of Inspira. “In just seven months we’ve built a loan book of over $50 million and generated an operational profit of $465,000 just this quarter,” continued Mr. Costine. “Our annuity stream revenue gives me confidence that our quarter-over-quarter growth will remain strong and we continue to invest heavily in origination partners as well as internal staff and are seeing these investments pay off as we increase our growth rate every quarter to achieve our goal of a $500 million loan book.”
“We’re starting to develop good momentum in several areas in this market,” continued Mr. Costine. “Our primary focus continues to be lines of credit in the million dollar range with yields as high as 18% and our strategy of offering small, introductory loans to catalyze our loan book as well as larger, short-term loans to generate strong cash flows appear to be working. As we grow, we expect to continue broadening our offerings and have recently ramped up our efforts to identify accretive acquisitions that can move our loan book size to over $100 million.”
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About Inspira Financial and the Fast Growing Market
The healthcare market in the U.S. is a rapidly expanding industry, with spending expected to exceed $4.5 trillion by 2020. Within this industry, over 1 million businesses have annual revenues in the $1 million to $50 million range. The emerging reimbursement trend towards more usage-based procedures, along with the fact that healthcare providers are being forced to increase patient volumes to maintain or grow profit levels, creates a need for increased efficiency and greater front-end investment in technology and larger staff sizes. These factors, as well as the realities that insurance providers are taking longer to pay than before and that patients are now bearing increased financial responsibility for medical bills, contribute to significant financial pressure and net working capital challenges for the average, smaller sized healthcare practice in the U.S.
Overall, traditional banks continue to reduce their risk profiles, term lenders require personal guarantees and first security over all assets, factoring lenders charge 25%+ annual interest and equipment providers have all but eliminated financing programs. The increasingly limited number of options for obtaining revolving lines of credit and loans for smaller healthcare providers creates a supply shortage in the market. This imbalance represents an opportunity for alternative lending companies catering to this demographic to capitalize upon. By targeting the 1 million+ healthcare providers in the U.S., Inspira believes it can generate high returns on government (Medicare/Medicaid) and large healthcare insurance receivables. Inspira plans to acquire debt and increase profitability through cross selling of financial services.
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