Factoring Medical Receivables
When it comes to Factoring Medical Receivables, there are two categories:
Some examples of companies that are suppliers to healthcare and medical institutions would be:
An excellent form of financing for both of these companies is selling their account receivables--a process known as 'factoring'. Factoring is converting the accounts receivable of a business into cash by selling outstanding invoices to a 'factor' or funding source at a discount. Accounts receivable factoring gives the business immediate cash to manage its operations more efficiently, sustain and grow the business. Selling your accounts receivables gives you the cash to:
Many businesses have not considered accounts receivable factoring when looking for financing, possibly because they do not understand it. However,factoring is one of the oldest methods of providing working capital to help businesses solve their cash flow needs. Cash flow problems often occur at the early stages of business development or during periods of rapid growth. Cash flow can become a problem in the healthcare industry when completed work is unpaid for 30, 60, or 90 days after issuing the invoice. This forces some businesses to try and obtain small business loans. However, conventional borrowing increases business expenses and normally requires additional collateral. Some companies --especially smaller ones are turned down by banks because of loan underwriting criteria. With accounts receivable factoring, instead of analyzing the applicant's financial statements, the factoring company evaluates the strength of the client's account receivables. If the business has a product or service that it provides to a creditworthy customer, then the business is a candidate for factoring. Accounts receivable factoring does not create debt or require additional collateral. It is very simple to use. Cash advances from 80% of the invoiced amount, depending on the customer and volume of business, can normally be obtained in 24 hours or less--and as often as the business has outstanding invoices and needs more cash. With the cash flow problem solved, your healthcare business has the working capital to pay salaries, reduce debt, improve vendor relations and focus on critical success factors--operations, sales and growth.
The Factoring Process Step by Step:
For more information on Factoring, click on the "Accounts Receivables" button on this website.
Frequently Asked Questions???Q: Do you buy accounts receivable?A: Yes! We do not lend money; we make an outright purchase of the financial rights to your invoices
at the time of billing. Q: What type of receivable is acceptable? A: Any valid invoice for healthcare services already performed that has not been pledged to another entity. Q: Are government receivables acceptable? A: Yes! Q: How do you collect? A: The same way you would collect: you invoice your customer for the service you performed. We then take over all collection responsibilities. Q: Is the invoice on our billhead or yours? Q: What will my customers think? A: Receivables-based financing is used by many of the largest corporations in the world to improve cash flow, support growth, and increase profits. Many of your customers may use this factoring service themselves and
others have become familiar with it through other vendors. The fact that you qualify for this 'credit line' makes a strong positive statement. Q: What is required before buying an invoice? A: The work/goods must have been completed, delivered and accepted; and your customer must be a creditworthy risk. Q: Can we qualify if we have a history of credit problems such as bankruptcy, IRS liens or judgments? A: Yes! Q: How do factoring requirements compare to debt financing? A: Unlike debt financing requirements, the Fundors do not require a history of profitability, a long operating history, personal collateral or any personal guarantees. Q: How quickly can I receive my money? A: Once an account has been established, you can receive cash advances within 24 hours for a verified invoice sent to an approved credit risk. _______________________________________________________________ Q: Can we qualify if we already have existing credit lines or SBA loans? A: Yes! Q: Can we qualify even if we are just starting in business and have no credit history? A: Yes, if you have creditworthy customers. Q: What will it cost? A: We publish our rates so that our clients (you) know exactly what each transaction will cost. Rates are available upon request. Q: How do you make money? A: We get our fee when the invoice is paid. (We subtract our fee from the 'reserve' amount after the invoice is paid and before we forward the balance of the reserve to you.) Q: What is the smallest invoice you will accept? A: We have no minimum! ______________________________________________________________ Q: What is the largest invoice you will accept? A: We have no maximum! We provide funds to any size business. Q: How long is your contract? A: There is no fixed-term to any of our contracts. You can sell us invoices for as long or as short of a period as you require. Q: Do I have to factor all of my invoices? A: No, you can factor as few as one or as many as all of your customers' invoices. Q: Do I have to sell my future receivables to you? A: No! Sell one or as many as you need to meet your cash flow needs. Stop when you wish, or continue as needed. Q: What happens if my customer does not pay? A: As a non-recourse factor, our Funding source assumes the risk of your customer not being financially able to pay for the services provided. However, we do not assume the risk of non-payment due to disputes regarding quality or
timeliness of goods or services. Q: Are there any geographical restrictions to your service? A: No! Q: Will factoring be good for my business? A: Yes, as long as you wisely use the additional time and cash derived from factoring. Factoring can be quite beneficial if you use it as a means to increase your sales, improve your credit, take advantage of early payment
discounts or focus on managing your business.
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