By Cara S. Trager
Dr. Eduardo L. Pignanelli realized a longtime goal last month when he opened Amsterdam Medical Practice, a multispecialty clinic serving Washington Heights’ Latino community. It replaces the smaller of two medical facilities that he has operated in the neighborhood for 15 years.
You might expect a physician whose business had 40 employees and annual revenues of $4.5 million to easily obtain a loan for expansion. But with credit markets tightening in 2008, even Dr. Pignanelli’s strong practice didn’t make him a shoo-in to get the money he needed to buy 5,000 square feet of raw condo space and transform it into a state-of-the-art health care facility. It wasn’t until the internist decided to use a go-between that he succeeded in getting bank financing.
The arduous search for credit began after the doctor had put down a $100,000 deposit for ground-floor space in a new development. With the clinic’s projected costs totaling $4 million—including the condo price of $2.2 million and $1.3 million for the build-out—he was looking to borrow $3.5 million.
“Just as I engaged the developer, the economic crisis erupted,” said Dr. Pignanelli, who is originally from Argentina.
He hired a financial consultant, and had his accountant prepare statements and complete reams of paperwork. He shelled out about $20,000 in professional and bank application fees, but Dr. Pignanelli didn’t hear back from any of the three lenders he approached.