Watsonville Community Hospital photo via Facebook

 State Treasurer Fiona Ma on Wednesay announced that three California hospitals have received $64.3 million in loan funds from the state’s $300 million Distressed Hospital Loan Program (DHLP).

The facilities include Watsonville Community Hospital in Santa Cruz County ($8.3 million), Pioneers Memorial Hospital in Imperial County ($28 million), and El Centro Regional Medical Center, also in Imperial County ($28 million).

“For the people and communities who depend on health care from these hospitals, this program is a lifeline,” said Treasurer Ma. “My team has worked diligently in the short time since this program was created to ensure that these funds are distributed as quickly as possible. We look forward to issuing more loans soon and to assisting these facilities however we can going forward.”

The DHLP provides zero-interest loans to financially distressed non-profit and public hospitals, with the goal of helping them stay open and achieving long-term financial stability. The program is jointly run by the California Health Facilities Financing Authority (CHFFA) and Department of Health Care Access and Information (HCAI). Nearly all funds were awarded to 17 facilities following the program’s initial application period, including $50 million for Madera Community Hospital and nearly $21 million for Visalia’s Kaweah Health Care District. 

Not-for-profit or public hospitals in significant financial distress, or a governmental entity representing a closed hospital, were eligible for loans. The loans carry a 72-month term with an initial 18-month payment deferment period. CHFFA will provide loan servicing and ongoing assistance to borrowers.

Formal approval letters were sent to approved borrowers beginning in August 2023 with detailed instructions and a list of required documents. CHFFA can begin the loan execution and disbursement process upon receipt of required documents from the borrower.

Additional loans will be issued in the coming weeks.