Healthcare companies often encounter financial difficulties due to slow payments from Medicare, Medicaid, and medical insurance businesses. A solution to this problem is medical factoring, which allows you to receive an advance of approximately 75 to 85 percent of the value of your unpaid accounts receivable. You obtain the rest, minus a factoring fee when the claims have been paid. Here are some of the advantages of this method of funding.
Strengthen Cash Flow
When you have to wait 30 to 120 days to get paid after completion of the healthcare services you have provided, your cash flow can become unpredictable. Medical factoring relieves you of the uncertainty of how long it will take to receive claim payments. Instead, you obtain the money you have earned immediately so you can use it for rent, utilities, employee salaries, equipment, and other needs.
Qualify Easily
Many smaller healthcare businesses may have difficulties in obtaining traditional financing. However, you can qualify for medical factoring even if you are just starting up and your assets are not substantial.
Obtain Funding Quickly
You can usually set up a program for factoring your medical receivables within a week or two at the most. The quickness of the setup procedure makes this type of funding especially desirable for healthcare companies that are experiencing cash flow difficulties and need financing right away.
Grow Your Business
In the long term, medical factoring assists you in growing your healthcare company by providing you with the required funding. You will be able to hire more personnel, offer additional services, and even expand to new locations because you have access to the resources that make these things possible. As your company grows, the medical factoring line can grow with you, as it is linked to the number of claims you have to Medicare, Medicaid, and other insurance businesses.
For more advice on medical factoring as a solution for the financing needs of your healthcare company, contact Crimson Stone Capital Solutions.
