Each year, 20,000 students graduate from medical school saddled with an average of $200,000 in debt. While a career as a physician is ultimately among the highest paid professions in the United States, compensation for residents and fellows—three to seven years—is low. With exorbitant student loan debt and low initial incomes, many future MDs struggle financially. Splash Financial in Cleveland, Ohio, offers a solution—a digital lending platform where medical professionals pay around $1 per month until the end of their residency or fellowship.
“These are future high-earners. It’s a low-risk population when you’re assessing repayment. But banks don’t take that into account when assigning traditional interest rates, so you get future physicians living paycheck to paycheck with loans coming due and a salary that doesn’t match,” said Steve Muszynski, CEO of Splash Financial. “We built our digital solution around this specific market, negotiating lower rates for these medical residents and fellows, freeing up money at a time they need it most, and affording them greater financial freedom.”
Splash partners with a bank, pooling its loans and selling them to banks across the country to secure lower rates. They bundle multiple federal and private debt lines into one offering for medical trainees, typically at one to two points below the national 5.5% average.
“When you’re making $50,000 as a resident or fellow, $4,000 saved on debt repayment is really substantial. It represents financial freedom—freedom to travel or live in a bit better apartment. It represents freedom for our customers to be their best,” said Muszynski. “That’s why we’re called Splash. We want to embolden and enable these new physicians to focus on what’s most important, their training, and make their mark—their splash—in their field.”
Muszynski began the company after hearing of a close friend and medical student’s financial duress during his fellowship. At the time, Musczyski was running an earlier iteration of the Splash platform—a general digital lending company called LendULink. LendULink went through the Bizdom accelerator, a former northeast Ohio regional partner of Ohio Third Frontier backed by Quicken Loans. After exploring—and being denied by—local banks and traditional digital lenders, Muszynski decided to pivot his company to specialize and capture this niche market.
It’s a decision he doesn’t regret.
“We were initially a college savings platform with the general message of, ‘save more, borrow less,’” said Muszynski. “There was nobody else in this specific space, so we’ve really attacked it head on and we’re excited about the potential to be major players in this industry.”
Splash Financial launched in April 2017 and is growing its customer-base rapidly. The company plans to target the Cleveland Clinic, University Hospitals and MetroHealth in Cleveland, but is available to medical trainees nationwide. Muszynski views the strong medical presence in Cleveland as the perfect climate for his business.
“Cleveland has shown a commitment to startups, especially early-stage startups, and the resources to support entrepreneurs. We have great universities to attract talent from,” raved Muszynski. “We have the top hospitals and medical programs in the nation, so we have our desired customers directly in our backyard. This is the ideal place to start a company—especially one in the health care.”