The former head of a now-defunct health care lending unit at JPMorgan Chase is starting a new firm that will offer financing for patients seeking dental, orthodontic and vision care.
Newport Beach, Calif.-based PrimaHealth Credit launched its online loan platform Tuesday. It enters a specialty consumer lending market in which finance companies team up with dentists and other health professionals to help pay for treatments that are not covered by the patients insurance plan.
Hugh Bleemer, the firms chief executive officer, formerly served as the president of ChaseHealthAdvance, a unit of the New York megabank that was wound down starting in 2012. ChaseHealthAdvance also made loans to patients for elective health care procedures.
Bleemer said in an interview that his new firm is aiming to make the loan application process simpler for both health care provider and the borrower. Its completely mobile-friendly, he said.
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PrimaHealth Credit will compete against Synchrony Financial, the consumer finance firm that was spun off last year from General Electric. Synchronys CareCredit unit, which offers health care financing to consumers, reported $6.7 billion in loan receivables in the first quarter. Before it was spun off by GE, CareCredit was ordered to refund $34.1 million to consumers over practices that the Consumer Financial Protection Bureau deemed misleading.
Other competitors in elective health care finance include the nations two largest marketplace, or peer-to-peer, lenders. San Francisco-based Lending Club has been offering loans for elective health care procedures after paying $140 million to acquire Springstone Financial in April 2014.
Prosper Marketplace, also based in San Francisco, has been in the same business since paying $21 million in January to buy American Healthcare Lending.
PrimaHealth Credit is not adopting the marketplace lending model, in which an online loan platform sits between borrowers and investors.
Instead, the company plans to lend from its own balance sheet on loans to borrowers with strong credit scores. On loans to consumers with blemished credit, the health care provider will shoulder the risk of default, Bleemer said.
PrimaHealth Credit is currently licensed to make loans in California, Oregon and Florida, and plans to get licensed soon in Texas, New York, New Jersey, Illinois and Pennsylvania.