Medical Factoring: Financing w/o Business Loans

There are few bigger pains for healthcare professionals than waiting 30, 60 or even 120 days to collect payment claims from insurance companies, HMOs and Medicare/Medicaid. The healthcare industry is riddled with complex billing, coding and processing rules that create very long payment cycles. This can be very hard for medical offices, testing and diagnostic centers, medical supply companies. There are always many ongoing expenses that can’t wait. There is rent, offices expenses that need to be covered, and payroll that must be met.

This situation creates a significant problem for most healthcare businesses. On paper, the company looks very profitable and seems to be doing very well. In reality, most of the money is tied up in slow paying claims with little cash to show for it in the bank.

When faced with tight cash flow, most professionals turn to their bankers for help. Medical doctors can usually qualify for signature loans or lines of credit. Other business professionals are not so lucky. A business loan or line of credit may help you in the short term, but it will not solve the main problem. Why? Well, business loans are good for buying equipment but not for covering recurring expenses. A line of credit is a better solution, but they usually have fixed limits that can’t be adjusted later. What happens if the business grows past the limits of the line of credit? Many healthcare professionals usually find out, the hard way, that the bankers that were happy to extend the first loan or line of credit will not be so helpful at increasing it. Unfortunately, bankers absolutely hate it when businesses come back for more money.

Interested in an instant online medical factoring quote? Please click here. Prefer to speak to a professional right now? Please call (877) 300 3258 (toll free)

If you look at the problem carefully, you will soon realize that the perfect solution should have the following characteristics. First, it should be able to accelerate your insurance payments so that you can get them quickly rather than slowly. Second, the solution must be able to grow with your business. So, if your business grows its billings, the solution should adapt the financing it delivers, seamlessly. Third, the solution should allow you to finance your growth indefinitely.

There is a solution that meets these criteria and is available to the healthcare industry. The solution is to finance your medical receivables using medical factoring. Medical factoring allows you to accelerate your payments from insurance companies, HMO’s or Medicare/Medicaid. It enables you to receive the majority of your net collectables within days of billing, streamlining your cash flow dramatically.

Medical receivables factoring, a specialty form of invoice factoring, allows you to sell your claims to a factoring financing company. The factoring company buys them – at a small discount – and pays you for them immediately. The factoring company waits to be paid while you get to use the funds to meet business expenses. As opposed to traditional business financing products, medical factoring has no arbitrary high limits. You can facto as many claims as you can generate, making it a great financing tool.

However, receivable factoring is not the best solution for every medical office. It works best in situations where your main challenge is that you cannot afford to wait to get paid in 60 to 120 days. It helps you meet ongoing expenses such as rent, payroll and lease payments. Medical factoring is an ideal solution for medical offices, rehabilitation centers, medical testing and diagnostic centers, medical supply companies and small to mid sized hospitals.

Interested in an instant online medical factoring quote? Please click here. Prefer to speak to a professional right now? Please call (877) 300 3258 (toll free)

Need more information? Go to the Medical Factoring Resource Center to the main medical factoring page.

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