There was a time when NBA teams were unable to select the best players in the draft because another team elected to use its “Territorial Pick.” That allowed any team to take the best player from schools in its area, regardless of its selection order in the draft. In 1950, the NBA threw out the “Territorial Pick” and all teams suddenly had the opportunity to go after the best players in any area, not just those in their own locale. 

Until 2020, most medical practices had been operating under very similar constraints. Their bank shopping consisted of whichever institutions had a brick-and-mortar presence in their area … and that resulted in limitations.

CMAC Partners has witnessed borrowers of the same creditworthiness receive vastly different terms with the only differing variable being which side of a state line each one falls. With the advent of COVID, however, those geographic lines have become blurred. Bankers, in a quest to satisfy their appetite for independent medical practices, now have at their fingertips greater technology that allows them to provide services to clients outside their locale.

What was once a business that required a hands-on approach can just as easily, and oftentimes more efficiently, be serviced from afar due to virtual means. This opens a world of possibility and competition to a marketplace that has historically been regionally gridlocked.

Working the System

The real winners here are independent practices that are now seeing enhanced banking services at lower costs and banking platforms that allow greater practice efficiency. Working with advocates who can represent a practice’s banking needs on a national level produces heightened competition resulting in improved terms from both local and regional lenders seeking to maintain their competitive positions in the market.

CMAC has seen the validity of this premise proved repeatedly as practices such as Olympia Orthopaedic Associates in Olympia, Washington and Cardiovascular Institute of the South in Houma, Louisiana have seen significant improvements to their operations in the past year since deciding to “cross state lines.” The time has come for physician groups to improve their bottom lines by expanding their horizons when it comes to their financing needs. It may take a bit of help from those who know the landscapes unfamiliar to borrowers, but the venture will pay unexpected dividends.