Plans to build out additional space in an adjacent building on Solar Street 

SYRACUSE — In the 1980s, David Birch spoke to a Syracuse audience about gazelles, mice, and elephants. Birch, the president of a research company called Cognetics, coined the terms to distinguish those firms that grew quickly and created most of the jobs from those that were mom-and-pop operations and Fortune 500 corporations, creating few net jobs. To be designated a gazelle, a company needed to grow at a compounded rate of at least 20 percent, thus doubling in size every four years.

Bankers Healthcare Group, Inc. (BHG) is growing so rapidly that it requires its own category of “super-gazelle.” Founded in 2001, the company grew 2,526 percent in its first decade. In 2012, BHG generated $150 million in revenue; this year it’s on track to hit $300 million. To accommodate its growth, the company in September 2013 moved into a new building on Solar Street in Syracuse. BHG is currently planning to build out additional space in an adjacent building to accommodate the growth expected this year. 

In doubling its revenue over the last two years, BHG has also increased its employee count from 126 to 190, of whom 70 are now in the Syracuse office. (The Florida office has 113 employees, New York City has 5, and Denver and Washington, D.C. each has 1 employee.). 

The firm’s client base has expanded from 50,000 to 70,000; the geographic reach has been extended from 43 to 50 states; and its banking relationships have grown from 400 to 500. BHG’s reserves have also increased from $44 million to $57 million and net assets are up from $61 million to $75 million. Not bad for a company starting out with $25,000 in capital.

“BHG is a private-equity firm that originates, funds, and places loans to licensed health-care professionals,” says Albert C. (Al) Crawford, the company chairman and CEO. “We originally focused on physicians, dentists, and veterinarians, but now include nurse-practitioners, physicians’ assistants, pharmacists, and physical therapists. The core business originates loans between $20,000 and $200,000 with repayment terms up to 10 years and then repackages most of them to sell to a group of banks, retaining an in-house portfolio of $15 million to $20 million.

“What sets us apart,” Crawford continues, “is how easy we make both the application and approval process. BHG turns around a loan request in 24 to 48 hours and typically delivers the money in five days. The client is required to provide a personal guarantee but doesn’t pledge any assets. There are no up-front fees, and the loans, which are classified commercial, do not appear on the borrower’s personal-credit report.”

Management team
Crawford, 52, who is a stockholder and has more than a quarter-century of experience in coordinating loan/lease sales and financing between banks and companies, holds licenses both as a commodities broker and stockbroker. He oversees credit underwriting, accounting, collections, and bank sales. The other two stockholders are the Castro brothers. The company president, Robert T. Castro, 47, is responsible for BHG’s loan origination and sales, and he oversees marketing. Eric R. Castro, 46, is BHG’s COO, who is responsible for all company operations while overseeing human resources and information technology. Each of the three principals owns one-third of the corporate stock.

In addition to the principals, the management team includes Edmund S. Durant as CFO, Chris Cali as general counsel, Chris Panebianco as chief marketing officer, Michelle Crawford as president of human resources, and Rosa Pinti as chief accounting officer.

Diversification
BHG has also diversified its business. “In 2012, the company established a joint-venture with Landmark Community Bank in Scranton, Pa. to offer credit cards through BHG’s Business Healthcare Group, LLC,” notes Crawford. “The program is marketed to BHG’s existing clients and to medical professionals who have not elected to take a loan out from BHG. The program is well reserved and has a $25 million facility. This year, we developed another credit-card joint-venture with a second bank creating a $250 million facility. The venture issues a MasterCard, called a ‘Power card,’ with three versions for consumers and another three for businesses. In keeping with our focus on making the process fast and simple, the … [applicant] gets portal approval in just 30 seconds. This is a tremendous growth area for us.”

BHG’s newest marketing concept is patient financing. “In December 2013,” notes Crawford, “the company created a joint-venture with a bank in Evansville, Ind. to offer patients, who may not be covered or covered in-full by insurance, the option to fund a $500 to $50,000 medical procedure. The application process is through a portal and consumers have up to 72 months to pay off their … [obligation]. We have already signed up 100 doctors who find it convenient to offer their patients a simple and convenient payment option.”

Managing rapid growth
Crawford recognizes that it’s a challenge to manage such rapid growth. “BHG needed an organizational health session,” asserts Crawford. “We had to teach young, aggressive leaders how to handle situations and how to work together … The company needed a roadmap for the leadership team. Everybody had to let go of their fears; the fear of losing a client, the fear of being embarrassed, the fear of feeling inferior. We needed to overcome our egos and create a place where each individual is respected, a place where transparency and humility replaced conceit and vanity. That’s how the team can create powerful relationships.

“I reached out to The Table Group, created by Patrick Lencioni, the author of the book ‘The Five Dysfunctions of a Team.’ The object was to avoid the usual dysfunctions of teamwork in order to make our organization healthier. The Table Group helped us to achieve specific and measurable outcomes by breaking down our [departmental] silos and improving our product speed to market. Our group leader, Pat Richie, emphasized substance over style … The sessions were a game-changer.”

BHG’s Syracuse location is at 201 Solar St. The company selected Syracuse–based Harmony Architectural Associates, P.C. as the architect and Parsons–McKenna Construction Co., Inc. of Liverpool as the general contractor. The 20,000-square-foot, single-story with mezzanine structure sits on 1.57 acres of land. The $3 million cost (land and building) required no borrowing. The plan now is to create an additional 3,000 square feet of space. The decision to expand in Syracuse was based on the substantially lower cost of construction.

Full speed ahead
Slowing down is not an option for BHG. “BHG is already looking at other joint-ventures,” asserts Crawford. “We think there are opportunities in the insurance field in the area of life, property and casualty, and medical malpractice. There is plenty of room to grow in our core business and in the joint-ventures already launched. We carry no debt and have a strong cash position. Our success has been based on our product innovation, strong financial capital base, industry relationships, understanding the marketplace, speed, flexibility, and vision.”

As a super-gazelle, BHG still has plenty of room to run.       

Contact Poltenson at npoltenson@cnybj.com