Asset-based lending to the health care industry has often been viewed by financial institutions and commercial finance companies as an area of vast opportunity, and on June 27, Marquette Financial Cos. announced that it had hired an industry veteran to build just such a practice for the privately held Minneapolis-based firm.

Martin Golden joins Marquette from Wells Fargo & Co.'s Wells Fargo Foothill subsidiary, and he previously held a position at General Electric Co.'s GE Healthcare Financial Services. According to Golden, his new venture will focus on execution creative structuring of loan programs and strong customer relationships to build a presence in a market that contains competitors ranging from global financial concerns all the way down to community banks.

"Health care, in general, is about 15% or 16% of the economy and, therefore, represents a big opportunity for lenders in the space," Golden told SNL Financial in an interview.

Owned by the Carl Pohlad family, Marquette has total assets of $2.6 billion and offers a range of primarily commercial finance products and services through a variety of subsidiaries. Golden's new company will be based in Portland, Ore., and will operate under the name Marquette Healthcare Finance.

Marquette will emphasize transactions of between $1 million and $10 million on a nationwide basis, targeting a broad swath of health care service providers, including long-term-care facilities, hospitals, home-health companies, diagnostic imaging centers, oncology centers and physician groups. Products offered will include revolving lines of credit, secured term loans and real estate financing.

"Those are companies that always have a difficult time finding financing, especially when you go through a period in the cycle where companies that have historically focused on [smaller deals] start to move [up-market]," Golden said. "Companies that can service those types of customers will find a great market opportunity."

Golden's goal is to get $350 million of assets on the books within five years.

"Given run-off, that means we'll have to book well over that," he added. "I feel like it's rapid growth, but also controlled."

Other commercial finance companies have found success in health care finance in recent years, among them CapitalSource Inc., which provides floating-rate, asset-based credit facilities ranging in size from $1 million to more than $100 million, in addition to a significant real estate operation.

"It's a terrific business," said CapitalSource CEO John Delaney, speaking in early June at NAREIT's investor forum, according to a transcript of his remarks. "We're very bullish on the health care finance business."

Other prominent players in the space include Textron Inc. unit Textron Healthcare Finance, CIT Group Inc. unit CIT Healthcare, as well as two of Golden's previous employers — Wells Fargo Foothill and GE. They are joined by a wide range of units of public institutions and smaller, private concerns.

"Relatively speaking, there's ample opportunity [for growth]," Golden said. "There are very few sectors where the field is wide open. There's so much capital in the market almost anywhere you go, but there's less competition in this part of the market than in most. Probably that's because a lot of people who do these deals are local bankers who don't have specific health care experience. They tend to go in and out of the market fairly quickly."

On the other end of the equation, Golden said, the larger players in the health care financing field continue to migrate up market to meet "tremendous" growth targets.

"GE's deal preference has gotten larger every year," he said. "You can make more money on bigger deals, so people tend to want to be in that space."

In between, Golden expects that Marquette will find opportunities to provide the creative solutions the bigger players tend to offer on larger transactions to its targeted customers in the small- to middle-market.

"The bigger the deals are relative to their desires, the more creative they're going to get in trying to figure out a way to do the deals," he said. "We're going to be willing and able to be creative on deal sizes where most people are just going to say, 'We don't have the time.' That's our major competitive advantage."

Health care financing operations haven't always been a home run, however, as evidenced by the implosion of asset-based lenders DVI Inc. and National Century Financial Enterprises earlier this decade. As Golden sees it, having specialized knowledge of the health care field and its nuances, such as Medicare and Medicaid reimbursement issues, is key to mitigating risk.

"Those risks can be controlled. I don't think they're worse [in health care finance] than anywhere else, you just have to understand them," he said. "If you don't, you're going to get into trouble."