Viability – A Critical Tool in Decision Making as addressed By Finbot

Firmly, the healthcare industry is moving into a Volatile, Uncertain, Complex and Ambiguous (VUCA) environment, a trendy managerial acronym in the business world, with which there are rapid changes in

• Healthcare and Methodologies
• Process of Health Care Diagnosis And Delivery
• Competitor Play
• Government Norms, Taxation and Accounting Standards
• Customer Expectations on Standards

Consequently, transpire higher health care delivery costs and exert immense pressure on profit margins for Healthcare service providers, like Hospitals and Diagnostic Centers.

Unarguably, under given circumstances, to clearly understand customers’ financial strategy and position a conventional underwriting model does not suffice. The historical data with less than minimum understanding about the project’s projections and its feasibility in the real world form the basis for creating traditional underwriting models, which is a flaw in them.

Hence, the best practice to countering it would be a proper viability study. The viability study serves as a tool to enhance the decision-making abilities of a financier. It makes it easy for financiers to decide on customers fund requests. Business viability study generally refers to the analysis of the business to understand its long-term survival and its ability to sustain profits over a while.

When a customer puts across a funds request for his business proposal, it would be reasonable for a financier to understand the financial-ratios of the customer's financials and the long-term financial viability of the business. In the case of Greenfield and the Brownfield projects, the business viability study becomes a critical element for decision making.

To be feasible, a business model must be sound strategically, financially and sustainable. Accordingly, a financial viability model should address the following for a better decision process,

• Market scale : What is the addressable market, and is it big enough to make commercial sense for the Hospital or Diagnostic Center?
• Product or service : is the Healthcare service or Diagnosis, competitive on a break-even basis? What is the unit’s USP? Experience in providing the Healthcare delivery or in handling the equipment? What are the entry barriers for other competitors?
• Break even analysis : What are the Cost and Revenue elements? How long will it be before the business is self-financing?
• ROI: Do the returns on investment compensate for the financial risk involved?
• Sensitivity analysis and collateral gap analysis : how does the financial ratios and projections change due to the shift in market variables? What is the collateral for backing the project funding? What and how is the gap in collateral mitigated?

Finbot’s Proprietary Viability Model tries to address the above questions alongside the understanding of the following,

• Localized and futuristic market potential
• Competitors and entry barriers
• Shifts and advances in technology
• Analysis with comparable companies or businesses
• Asset valuations for collateral gap understanding and mitigation

With these understandings, Finbot provides suitable and applicable structured finance solutions for enhanced viability in the project, thereby driving positive credit decision-making for the customer's proposal.