Healthcare Expansion Loan Program II (HELP II) Grant

The Healthcare Expansion Loan Program II (HELP II) offers low-interest loans to California's non-profit small or rural health facilities. With loan amounts ranging from $25,000 to $1.5 million, borrowers can utilize funds for property purchases, equipment, and renovation projects. To qualify, applicants must meet specific eligibility criteria, including being a licensed health facility and demonstrating fiscal soundness. This program aims to enhance healthcare access and services across the state, providing crucial financial support to eligible organizations.

NOTE: Applications are accepted on a continual basis. Applications are due by the 20th of the month to be included on the agenda for the following month’s meeting date.
Purpose
This program will provide low-interest rate loans to California's non-profit small or rural health facilities in an efficient, timely, and cost-effective manner.
Use of Funds
Funds may be used for:
Purchase, construction, renovation, or remodeling of real propertyPurchase equipment and furnishingsPerform feasibility studies, site tests, and surveys associated with real propertyPay permit fees, architectural fees, and pre-construction costsRefinancing existing debt, but only when a single obligation is paid in full
Loan Terms
Minimum loan amount of $25,000Maximum loan amount of $1.5 million ($1 million for refinancing existing debt)Interest rate of 3% (4% for refinancing existing debt)Maximum loan maturity depends on use of funds.  Between 5 years for equipment and furnishings and 20 years for the purchase, construction and renovation of real property (15 years for refinancing existing debt)Gross revenue pledge, as well as a lien on the equipment or property, is requiredMaximum loan-to-value ratio of 95%Borrowers must contribute a minimum of 5% (in the form of cash or documented project expenditures) toward project costsProforma debt service coverage of at least 1.0x
Fees
$50 non-refundable application feeInitial fee of 1.25% of the loan amount payable at closingNo ongoing program fees

Eligibility

Eligible ApplicantsMust be a health facility as defined in the Authority's Act (Section 15432(d) of the California Government Code)Must be a non-profit 501(c)(3) corporation and qualify as a small or rural health facility or public health facility (e.g., district hospital) as defined in the Authority's Act (Section 15432(e) of the California Government Code) Small facilities must have annual gross revenues of $30 million or less (no revenue limit for rural facilities or district hospitals)Must be licensed by the State of California, typically through the Department of Health Care Services, Public Health, or Social ServicesMust have been in existence for at least three years, providing the same types of servicesMust demonstrate evidence of fiscal soundness and the ability to meet the terms of the proposed loanFacility must be certified, organized, maintained and operated for the diagnosis, care, prevention, and treatment of human illness, or physical, mental, or developmental disability, including convalescence and rehabilitation and including during care during and after pregnancyMatching Funding Requirement:Borrowers must contribute a minimum of 5% of the project costs The borrower's funds must be in the form of cash or document project expenditures For refinancing transaction, the borrower's funds must come from the equity in the property

Ineligibility

Ineligible UsesAppraisal feesTitle feesFinancial advisor feesAuthority loan fees