Bankers Healthcare Group reaches $1 billion in loans

SYRACUSE — Reaching $1 billion in loans is just another milestone for a company that has averaged 2,526 percent growth over the last decade. This sustained expansion has earned Bankers Healthcare Group, Inc. (BHG) continued recognition on Inc. magazine’s list of the fastest-growing companies in America.

BHG is a private-equity corporation that originates, funds, and places loans to licensed health-care professionals. The company, which operates in 43 states and, to date, has served more than 50,000 clients, was started by Robert Castro, Eric Castro, and Albert C. Crawford in 2001. The trio met on Martha’s Vineyard and soon joined together in a company called Apex Financial Services. The three partners bought the company within a year and changed the name to Bankers Healthcare Group in August 2002. At the time of the launch, BHG’s start-up capital amounted to a scant $25,000. Within three months, the fledgling company generated $5 million in loan sales.

Corporate headquarters is located in the Ft. Lauderdale, Fla. area, where the Castros oversee sales origination and funding. Crawford, the chairman and CEO of BHG, is responsible for marketing, credit underwriting, accounting, collections, and bank sales from the Syracuse office, currently located at 325 James St.

Crawford projects BHG’s sales “… to be well north of $150 million in 2012.” The company currently employs 126 and projects adding another 8 to 10 workers this year. BHG typically makes loans in a $20,000 to $200,000 range with terms up to 10 years, repackages the loans, and sells most of them to a group of 400 community banks, while retaining an in-house portfolio of $15 million to $20 million. 

Crawford cites BHG’s business model as a major reason for the company’s success. BHG focuses only on loans needed by doctors, dentists, and veterinarians to run their businesses: working capital, debt consolidation, and equipment financing. 

The company makes the process easy and offers fast approval. “We’re like FedEx,” says Crawford. “We offer different rates and delivery times depending upon the level of service requested.” BHG can turn around a loan request in 24 to 48 hours and typically deliver the money in five days. In return, the client offers a personal guarantee but pledges no assets. There are no up-front fees and the loans, which are classified commercial, do not appear on the borrower’s personal credit report. BHG offers service and speed because the firm has developed a detailed credit composite of its clientele, whose annual income averages $345,000 and 10 years in business, and because it uses its own funds for lending.

Crawford, 50, cites a second reason for BHG’s explosive growth — “… the staff, headed by a dynamic management team.” Crawford, as chairman and CEO, has a quarter-century of experience in coordinating loan/lease sales and financing between community banks and companies. A 1984 graduate of Gettysburg College, he holds licenses as both a commodities broker and a stockbroker and is the sole owner and president of another company, A.C. Crawford Futures, Ltd.

Robert T. Castro, 45, serves as BHG’s president and is responsible for loan origination and sales. Before BHG, he was president of Finance Team of America (FTA), a commercial-finance institution located in Florida from 1993 until 2001. 

Eric R. Castro, 44, holds the office of COO at BHG, overseeing operations at the corporate office in Florida and managing the underwriting of the medical-loan portfolio. Eric Castro previously served as FTA’s vice president, COO, and senior credit officer. Under the leadership of the Castros, FTA facilitated and underwrote about $350 million in commercial financing and became the primary origination source for four national leasing companies. 

The BHG management team also includes Edmund S. Durant as CFO, Chris Cali as general counsel, Chris Panebianco as the vice president of marketing, and Michelle Crawford as the senior vice president of placement and human resources.

Crawford and the Castro brothers are the only BHG stockholders, each owning a third.

Continued growth in BHG is not only coming from the traditional loan portfolio but also from new marketing directions. The company recently established a joint venture with a community bank in Scranton, Pa. — Landmark Community Bank — offering a credit card through BHG’s Business Healthcare Group, LLC. The program markets the credit cards to its existing clients and to medical professionals who have elected not to take out a loan from BHG. Landmark owns 50.1 percent of the venture, with BHG owning the remaining 49.9 percent. The firm markets the cards in all 50 states.

BHG also set up the Fund-Ex program 18 months ago to offer loans to those clients seeking funds up to $5 million at lower interest rates than those offered by direct BHG loans. These loans, with interest rates as low as 6 percent and terms out to 25 years, qualify for the Small Business Administration’s (SBA) 7(A) loan program, which guarantees most of the proceeds for the purchase of land and buildings, equipment, new construction, the purchase of existing businesses, and for similar expenditures. 

Since BHG is not an SBA–approved lender, it originates and places the loans with banks such as Oneida Savings Bank, Beacon Federal, Generations Bank (formerly called Seneca Falls Savings), and Adirondack Bank. Fund-Ex generated $30 million in 2011, and Crawford projects “… revenues in 2012 of at least $50 million.” Crawford goes on to say, “we have done no marketing yet of Fund-Ex but already receive 650 applications each month.” Fund-Ex currently employs 14.

Crawford and the Castro brothers also own a company called BHG Commercial Credit, which is not affiliated with the health-care field. The company handles invoice factoring, international-trade finance, and other non-health-care activities. BHG Commercial Credit works with exporters with the requirement that all transactions be part of a government-backed program. While current revenues for this company are under $1 million, the three stockholders are focusing their attention on the growth potential

Syracuse move/expansion

Crawford anticipates rapid continued growth, especially in the credit card and Fund-Ex programs. To deal with the growth, BHG recently bought property on Solar Street in Syracuse’s Franklin Square area and retained Parsons–McKenna Construction Co. to tear down an existing structure on the property. Bids for a new 19,000-square-foot, one-story building with mezzanine are expected soon with occupancy anticipated in the first half of 2013. The new structure will initially house about 55 employees, with plenty of room for additional staff. Crawford says the decision to expand in Syracuse “… is based on the fact that expansion in Florida would cost four times the cost of expanding in Syracuse.”

On May 15, the Syracuse Industrial Development Agency approved tax exemptions related to the project that will save BHG nearly $95,000 on sales taxes on construction materials, furnishings and fixtures, as well as mortgage-recording taxes, according to a story on Syracuse.com. 

Bright future

With $44 million in reserves, $61 million in assets, and no debt on the balance sheet, BHG plans to grow aggressively. “The future looks good,” says Crawford, “with plenty of [medical] professionals who still want their own practice and with the demand for expanding rural hospitals.” Michelle Crawford says the company has “… no trouble attracting phenomenal, young talent,” especially with the number of colleges and universities in the area. Finding experienced employees is more of challenge and requires a national search.

BHG has been nominated in 2012 by Ernst & Young for the accounting firm’s “Entrepreneur of the Year” award.