By Mark Stellwag, Jr. – Senior Commercial Relationship Officer at Popular Bank

Running a behavioral health facility comes with a set of unique challenges that include regulations, specialized staff, and life-changing care to vulnerable populations. Frankly, wondering whether your banker understands your business is not usually top of mind.

Yet, choosing the right banking partner can make a big difference in your facility’s growth potential and day-to-day operations. Here is why your banking relationship matters more than you might think.

The banking landscape for behavioral health.
A combination of regulation, insurance reimbursement complexities, and perceived risk factors can discourage financial institutions from fully embracing this sector as an attractive lending customer. From limited lending options to lengthy approval processes, banks tend to view behavioral health facilities through a lens of caution.

The industry has seen significant consolidation in recent years, with larger healthcare systems acquiring smaller facilities and private equity firms entering the space more actively. This trend has created both opportunities and challenges for independent regional operators who need banking partners that understand their unique position in the market.

Financing realities and solutions.

According to the National Institute of Mental Health, an estimated 23% of all U.S. adults (59.3 million) live with a mental illness, ranging from mild to moderate and severe. As we continue to get better at diagnosing the conditions and identifying treatment paths, the demand for behavioral health services is likely to continue to grow.

As such, the reality of behavioral health cash flow can be a challenge. Insurance reimbursements can take up to 90 days, while payroll and operational expenses continue weekly. In addition, some facilities may take on more patients during certain times of the year to offset for slower months, requiring additional resources. A lender that understands these cycles can offer cash management solutions and a working capital line of credit, tailored to the specific needs of your facility. The right banking partner will work with you to structure financing that aligns with these operational patterns rather than fight against them.

Making banking work for you.

When set up correctly, your banking relationship becomes a strategic advantage, not an administrative nuisance. A knowledgeable banker helps you navigate industry challenges, identifies growth opportunities, and manages the unique financial aspects of behavioral health operations. In an industry where your mission is helping people rebuild their lives, having a bank that not only understands the industry, but truly supports your mission makes all the difference.

Mark Stellwag, Jr. is a Senior Commercial Relationship Officer at Popular Bank, specializing in Behavioral Sector financing. He can be reached at mstellwag@popular.com.