The California Health Facilities Financing Authority, or CHFFA, board announced Thursday that it approved an emergency loan program for California health facilities impacted by the COVID-19 pandemic.
This $5 million program enables small and rural health facilities and district hospitals to take out interest-free loans of up to $250,000 in order to fund construction, day-to-day operations and equipment purchases. It also allows them to receive reimbursements for expenditures related to COVID-19.
CHFFA Executive Director Frank Moore said in an email that the board created the program to help smaller facilities continue operating through the pandemic.
“Small and rural health facilities in California have been operating on a shoestring budget for years, unable to build emergency reserves,” Moore said in the email. “Unlike larger hospitals that have the financial resources to weather the devastating financial impact of the COVID-19 pandemic, small and rural health facilities face going out of business due to increased COVID-19 related costs and decreased revenues as a result of the suspension of elective procedures.”
Some of the program’s loans, including loans for working capital, can be paid back as late as 15 months after they are taken out. Others, such as construction and improvement loans, can be paid back as late as 20 years after.
Beneficiaries of the program can also get deferrals for up to three months of payments on their outstanding loan balances to account for the financial harm caused by the pandemic.
To qualify for these loans, facilities must provide evidence that they have been negatively impacted by the pandemic, and they have to prove that the money from these loans will go toward fixing these issues.
“We have left this requirement intentionally inexplicit to give applicants the flexibility to submit a wide range of documents,” Moore said in the email. “Since the program will provide loans for prior expenditures, the applicant can apply for a loan to finance items that have already been purchased.”