Medical 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
medical receivables factoring.
Medical 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.
Medical 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,
medical factoring should provide you with the working capital you need to operate and grow your business.
About Invoice Factoring Group
We can provide you with a free
medical factoring,
medical receivables factoring or
invoice factoring quote for your healthcare company. Marco Terry, the president, can be reached at 1 866 730 1922.
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