Question: Due to cash flow problems, I am not always able to have my inventory fully stocked. As a result, I recently lost a big order with a hospital. How can I prevent this from happening again?
Answer: To a DME/HME provider, inventory is a matter of survival! Your biggest concern is delivering the last unit in inventory and not having the cash to replace it. If a customer calls seeking that item, you could lose the account because you can't deliver. If it's a new prospect calling, you'll lose them to a competitor. Further exacerbating the problem, you may only be days away from your Medicare or Insurance payment. This theme is quite common to DME/HME providers'. If you disappoint a client or prospect and cannot deliver, you've no doubt lost them.
You can avoid this scenario by having adequate start-up capitalization to meet your business plan's forecasted demand through loans, lines of credit, or equity partners. However, when you outgrow your initial capitalization, arranging financing to meet current demand can be time consuming and limited by the terms of your capitalization. And you need to be able to forecast demand pretty accurately. A solution to this dilemma is to accelerate your cash flow to keep it current with your inventory needs.
A DME/HME provider has a powerful funding tool to do so that you might not be aware of. Medical Accounts Receivable (MAR) Funding enables you to utilize a non-performing asset, your receivables, to generate debt-free readily available cash. With this funding tool, the flow of your daily invoicing can generate a flow of daily cash and your funding availability grows as your accounts receivable grows. MAR Funding is the most efficient form of cash flow enhancement in the financial marketplace. Loans and lines of credit are important tools for a successful financial strategy, but when adequate cash flow is critical to managing your inventory, Medical Accounts Receivable (MAR) Funding should be evaluated.
Sun Capital HealthCare (SCH) specializes in medical accounts receivable funding. SCH is unique being experienced in how the healthcare business works and focused solely on
medical accounts receivable (MAR) funding and understands
working capital needs, focusing on keeping funding costs as low as possible.
