![]() ![]() “I didn’t want to be dependent on one company, because then you’re really just an arm of one bank.” “I said, Holy cow! What if something like that happens again?'” says Kaplan. But she had learned a blunt lesson: Medicard couldn’t rely on just one or two funding sources. In the end, Canada’s conservative banking practices saved the day, says Kaplan. Although Medicard kept operating without interruption, it found additional financing impossible to come by for at least a year, while Canadian banks waited to gauge the impact of bank collapses in the U.S. “We were right in the one area that you don’t want to be in,” says Kaplan. Like so many other firms, Medicard was suddenly frozen out of new credit and facing a doubling of financing costs. But, as long as the banks provided stable, low-cost financing, she was willing to stick it out and wait for better terms. Sure, it would limit Kaplan’s potential for a lucrative cash-out from her firm. It wasn’t seed capital from an angel investor, where I would eventually lose control.”įor a time, this seemed to be a sound strategy. During Medicard’s startup, Kaplan relied heavily on her primary lender, the Bank of Montreal: “I built the company the really hard way, where I kept ownership and funded it through large financial institutions. ![]() Kaplan’s diversification drive, however, didn’t extend to her own sources of financing - at least, not at first. Although cosmetic procedures account for almost 60% of its business, the fastest growth is in medically necessary procedures such as MRIs, drug rehabilitation and infertility treatments. Today, Medicard offers financing to patients via almost 6,500 affiliated doctors across Canada, and has revenue of $25 million. It launched The New You Show, a consumer show (now on indefinite hiatus) about cosmetic procedures, and several websites, including dentalcard.ca and cosmeticsurgeryinformation.ca. Medicard expanded into cosmetic dentistry (issuing a credit card called the DentalCard) and veterinary procedures (PetCard). When the firm wasn’t growing up, it was growing out - diversifying into every niche imaginable. With demand for these rising by 35% a year, Medicard’s revenue skyrocketed from $1 million in its first year to $1 million a month in its second. It was this obvious need that led Kaplan to launch Medicard, although initially it financed only cosmetic procedures. ![]() She could only wonder how patients would pay for the types of procedures that governments no longer covered. When Kaplan launched Medicard in the mid-1990s, Ottawa was in full deficit-fighting mode and slashing health-care funding. She remembers the frustrations of her father, a radiologist who provided free ultrasounds because the government wouldn’t fund them: “He kept saying, They’re going to need private clinics. But she’d been raised by doctors in a family in which concern over the health-care system was ever-present. When Kaplan first considered entering the consumer-financing business in 1995, she was a single mother in her 30s who had moved from Vancouver to Victoria to take care of her dying father. “They don’t have the infrastructure or understanding of the market. “My goal is to create an entity that someone like GE Capital can’t just come in and copy,” says Kaplan, her firm’s president and CEO. And, more than just a lender, the firm aims to become the central service provider in its niche. IFinance will own an array of subsidiaries sprawling across the private medical space, from cosmetic enhancement to veterinary procedures to infertility treatment. It will repay investors from the interest it charges on these loans. This new company will not only access funding through banks, it will become a bank in its own right, issuing term deposits to sophisticated investors whose funds iFinance will use to finance medical loans. Later this fall, Toronto-based Medicard will become a subsidiary of a new entity, iFinance Canada Inc. Her firm, Medicard Finance Inc., is now pulling together the final pieces of a strategy aimed at making Medicard - a provider of consumer loans for medical procedures not covered by medicare - an even more entrenched player in a sector dominated by the banks’ all-purpose credit cards. Ann Kaplan is building a fortress in a land of giants. ![]()
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