Medical Factoring Financing - A Tool for Medical Supply
Companies
Medica
l supply companies in general are very profitable
enterprises. However, most medical supply companies operate on a
very tight cash flow. Unfortunately, the challenging billing
procedures and slow payment cycles of insurance companies, HMOs
and Medicare/Medicaid create a situation where many companies
wait 30 to 60 days before getting paid.
Cash flow can get even tighter if the company's sales grow, or
if the owners decide to open new locations. When this happens,
most company owners try to obtain bank financing through a loan
or line of credit. However, qualifying for bank financing is
incredibly challenging as they will only lend money to a
business that shows profits for three straight years and can
provide audited financials.
There is a financing alternative in the healthcare industry that
has been used with success with medical supply companies. This
solution provides you with quick financing based exclusively on
your sales. Furthermore, since financing is tied to sales, the
line of financing grows as your sales grow. The solution is to
factor your medical insurance claims using medica
l receivables factoring.
Medica
l factoring provides you with immediate financing based on
your slow paying insurance and Medicare/Medicaid claims. Rather
than waiting 30 to 60 days to get paid, with medical factoring
you can get paid in a few days. This frees up significant cash,
allowing you to finance operations, and more importantly, to buy
supplies and fuel new sales.
As opposed to bank financing, where the bank lends you money,
the factoring company
buys your invoices and pays you immediately for them. The
process is fairly straightforward. But more importantly, this
also means that you are free from the traditional bank lending
requirements. Medica
l receivables factoring is easier to qualify for, and often,
the owners' personal credit is not a consideration.
Factoring your medical receivables can be an ideal solution for
you medical supply companiy if your main challenge is that you
cannot afford to wait up to 60 days to get paid by insurance
companies. If that is the case, medica
l factoring should provide you with the working capital you
need to operate and grow your business.
Copyright (c) 2006 - Commercial Capital LLC. Article may only be
reprinted if it is not modified and all links are kept live.