Long term debt alternatives for hospitals - Article Example

Only on StudentShare

Extract of sample
Long term debt alternatives for hospitals

Hospital financing has never been so easy. With lots of options to choose from and government’s encouraging policies to back upon, the financing part of the hospital has
become organized and comfortable for all the involved parties.Once the proposed hospital’s capital has been decided, the desired method of the capital funding needs to be determined. In the US hospital industry, approximately 50% of the assets are financed through equity and 50% through debt. Long term debt financing is available from at least four major sources: tax-exempt revenue bonds, Federal Housing Administration insured mortgages, public taxable bonds, and conventional mortgage financing.To obtain debt financing, hospitals must maintain a certain level of financial performance as measured by various ratios of assets to liabilities or income to expenses.The two prominent long term debt alternatives for hospital are:1. Conventional mortgage: A mortgage in which the interest rate does not change during the entire term of the loan and that is not insured or guaranteed by the government. Interest rate is the rate which is charged or paid for the use of money. An interest rate is often expressed as an annual percentage of the principal. It is calculated by dividing the amount of interest by the amount of principal. Interest rates often change as a result of inflation and Federal Reserve policies. For example, if a lender (such as a bank) charges a customer $90 in a year on a loan of $1000, then the interest rate would be 90/1000 *100% = 9%. ...
Download paper


Hospital financing has never been so easy. With lots of options to choose from and government’s encouraging policies to back upon, the financing part of the hospital has
become organized and comfortable for all the involved parties…
Author : gkirlin

Related Essays

Long-Term Sources of Finance
preference equity, common equity, debt and leasing. Long-term Finances A business needs funds for capital investments such as fixed assets like plant, machinery, land, building, furniture etc. These assets must be financed with long-term financing sources. The chief financial officer (CFO) is usually responsible for making suggestions to the senior management and board of directors related to financing issues. These suggestions and recommendations carefully analyze the advantages and disadvantages of each long-term financing option. After the decision is made by the senior management and the...
8 pages (2008 words) Essay
Events Related to Long Term Capital Management, The Housing Crisis, and Current Events Related to Sovereign Debt in Europe
The global housing crisis refers to the peaking prices of housing that started around the latter part of 2006 and continues to manifest even presently. In 2008, the highest ever housing prices were recorded. Perhaps this was because of the global financial crisis that the world was undergoing during this time. The US is one of the countries worst affected by this housing crisis. The housing crisis is so serious because not only does it affect individuals, but it also affects the nation’s mortgage markets. In the US, this crisis has been called the bursting housing bubble. The European...
3 pages (753 words) Term Paper
Long-Term Investmet Strategy
A normal life insurance policy functions as a financial coverage for a person and his/her family in case of the person’s demise. Apart from that, a person can also enjoy a number of other returns, which the person would get after the contract matures. These profits are paid in a structured settlement or slabs (Oviatt 19). Life insurance is an agreement between both an insurer and an insured (insurance contract holder), where the insurer guarantees to pay a selected receiver a sum of cash (the "benefits") upon the passing away of the insured individual. Relying on the contract, other...
4 pages (1004 words) Essay
Long-Term Investment Strategy
Again, the savings have to be an equal amount of money that I get from my security fund every month. I really want that when I retire, I have enough money that can enable me to build a bigger and expensive residential home and also have business premises in the city. Therefore, in addition to saving for my children, I’d like to save close to $6 million for the premises project. To be able to achieve all these goals, my monthly retirement savings must be put into an investment that will enable this money to multiply. This will help me to both save and invest at the same time. By saving, I...
4 pages (1004 words) Essay
Case study (Faith Community Hospital)
Thus, an appropriate solution should focus on (1) increasing hospital efficiency without resorting to extreme cost-cutting measures (2) coordinating staff activities, to reduce inefficiency and unnecessary expenses; and (3) mending the hospital's reputation to rebuild confidence from the community, its patients, and other major stakeholders, hence increasing the hospital's incoming patients....
2 pages (502 words) Essay
Budgeting and Financing
No matter how one refer to it, it's a tool to help him/her to prioritize spending and manage money-no matter how much or how little he/she has. A fiscal deficit is regarded by some as a positive economic event. For example, economist John Maynard Keynes believed that deficits help countries climb out of economic recession. On the other hand, fiscal conservatives feel that governments should avoid deficits in favor of a balanced budget policy. Fiscal deficit is an economic phenomenon, where the Government's total expenditure surpasses the revenue generated. It is the difference between the...
6 pages (1506 words) Essay
Long-Term Liabilities (Assignment 9)
Long-term income taxes payable recorded a negative change of 49.44% from the previous. This clearly indicates that the company reduced its long-term income tax payable by 49.44 percent. This is a good sign of the efforts of the company tom reduce long-term liabilities. According to the notes on the financial statements, the management of the company recorded that the company recorded a significant reduction in income tax payable as a result of changes in tax policies. The U.S. federal and state tax audits resolved to lower the rate of income tax rate from 32.5 percent in April 2, 2011 to 12.7...
2 pages (502 words) Assignment
Got a tricky question? Receive an answer from students like you! Try us!