As an update to our previous post, on Monday, May 15, 2023, California Governor Gavin Newsom signed into law Assembly Bill 112 (“AB 112”), which is designed to provide critical relief to qualified struggling hospitals across the state. AB 112 creates the $150 million Distressed Hospital Loan Program, which is intended to provide zero-interest cash flow loans to qualified not-for-profit and public hospitals experiencing financial distress, as well as qualified government entities representing hospitals that closed after January 1, 2022. Hospitals across California, particularly those in underserved areas or serving vulnerable populations, have been hit hard by rising costs, budget cuts and strains on resources caused by the COVID-19 pandemic. By securing access to necessary capital, hospitals may be able to sustain their operations, maintain staffing levels, and continue delivery of care to their communities. Recognizing this, the California Legislature unanimously passed AB 112 in both chambers earlier this month. With Governor Newsom’s seal of approval, qualified hospitals may apply for loans through the Distress Hospital Loan program and obtain some needed relief.
