Callaway Community Hospital has received a $5 million loan to finance $1.5 million in improvements and lower its debt costs.
The hospital is owned by SunLink Health Systems, Inc. of Atlanta.
Robert M. Thornton Jr., chairman and chief executive officer of SunLink, said the loan will permit $1.5 million in improvements and additional services. A geriatric psychiatry unit will be created. Part of the money also will be used for working capital.
About $3.25 million will be used to refinance a portion of the company's senior debt.
Allen AuferHeide, chief executive officer of Callaway Community Hospital, said the proceeds from the transaction also will allow the hospital to make improvements to its Emergency Department. "It will allow us to expand our services to these patients as well as provide an expanded and more comfortable area for patients entering the hospital for scheduled outpatient services," AuferHeide said.
Work is underway on architectural and engineering plans. "Construction is expected to being with the month," he said.
The loan from Pioneer Bank was partially guaranteed under the U.S. Department of Agriculture's Rural Development Business & Industry Program.
The $5 million loan is repayable monthly during 25 years at a floating prime rate plus 1.5 percent.
The loan is collateralized by the hospital's real estate and equipment. SunLink was assisted in the transaction by Healthcare Finance & Development LLC.
"In addition to lowering our borrowing costs and improving our cash flow, this financing allows us to invest in improvements at the hospital and add these new geriatric psychiatric services, which are in high demand in the community," Thornton said.