For Dr. Nathan Brinckhaus, medicine is more than a career: it’s a family trade, and one that has allowed him and his father to serve their Northern California community of Fortuna for decades. After completing his medical residency at University of California, Davis, Nathan returned to his hometown to join Fortuna Family Medicine – the clinic his father had taken over from a previous owner, which has been open continuously since 1948. This year, when they needed working capital after reopening as a new rural health clinic, a loan guarantee from California Capital FDC through the Small Business Loan Guarantee program allowed them to bridge their difficult first year of the new operation and continue serving their community.
When Nathan and his father, Dr. Ruben Brinckhaus, were faced with the reality that their revenue would not allow them to continue providing affordable care to their longtime patients, they made the difficult decision to open a new clinic with a new business model.
“We chose to open a new independent federally-designated rural health clinic,” says Nathan, adding that the model provides more sustainable reimbursement from MediCal insurance, because it allows clinics to functionally decide their reimbursement rate based on their expenses in the first year of operation, known as the rate-setting year. It is a model that can ensure sustainability for clinics in small communities—but one that, as Nathan notes, requires a good deal of up front investment to begin.
“We chose [the model] knowing it was going to require capital,” he says. “We knew we wanted to spend enough money so that we could get a healthy reimbursement rate.”
To supplement funds that they received from a private investor, Nathan began exploring borrowing options for working capital. He quickly found that non-traditional lending would be his best bet. “This type of project is not something that you can go to a regular bank for,” he says, explaining that opening a new business in the medical field can require creative financing options. “[Banks] want to see profits and taxes. For a brand new business without those things, I was told by several banks that they couldn’t help me.”
When Nathan came upon the network of mission-based small business lenders, he knew he’d found the right fit. He applied for a loan through Arcada Economic Development Corporation, now called North Edge Financing, who were determined to see Fortuna Family Medicine Succeed. “I was able to present our business plan and tell them what we were doing and why we needed money. They were able to see the vision that we had and that we had a plan that was reasonable.”
To approve the loan, they worked with California Capital FDC, who administers iBank’s Small Business Loan Guarantee program. With a guarantee on the loan, Nathan succeeded in accessing the funding necessary to keep their clinic open, and plan for the future. “Having the capital took a lot of stress off our shoulders,” he says, “It was great knowing we could continue this project and be successful.”
