Factoring has gained popularity as a solution that provides financing for medical practices, diagnostic centers, and other types of healthcare businesses. This article includes some of the most important advantages of working with medical factoring companies to improve your cash flow.
1. Improves your cash flow
The most important benefit of using medical receivables factoring is that your cash flow improves, often dramatically. Your medical insurance claims will be paid in a couple of days, instead of the usual 30 – 120 days. This advantage can be important for small and growing healthcare providers who are running low on resources.
2. Provides predictable cash flow
Claim payments can be unpredictable. Some pay quickly, while others can take months to pay. This unpredictability often creates problems for medical providers because they never know how much money they will get in a given month. As a result, it is impossible to accurately forecast your cash flow.
Factoring your medical receivables fixes this problem and provides you with predictable cash flow. You can choose which providers to finance and when to submit claims, which gives you ultimate control over your finances.
3. Provides flexibility
The factoring line is flexible and is tied to the volume of your medical claims to insurance companies. The line can adapt and increase as your business grows. This benefit makes factoring a perfect solution for medical practices and healthcare businesses that are growing quickly.
4. Allows you to plan for growth
Having better cash flow and predictable revenues allows you to plan for growth. This capability is an important long-term benefit of factoring. You can add employees, expand services, and add locations – with the certainty that you will have the cash flow to pay for them.
5. Works with Medicare and Medicaid
One important advantage of medical receivables factoring is that it can be used to finance Medicare and Medicaid receivables. This advantage is important for healthcare providers who service a large patient base.
6. Available to small and growing businesses
Medical receivables factoring is available to small business owners and doctors who are just starting out and don’t have substantial assets. It’s also available to growing healthcare businesses that are running low on resources.
7. Can be set up quickly
Most medical receivables factoring programs can be set up in a week or two. Furthermore, you have significant control over the duration of the due diligence and setup processes. This quick setup makes factoring an ideal option for healthcare businesses that have a cash flow shortage and need an immediate solution.
Note that setting up a medical factoring program for a large facility, such as a hospital, may take more than two weeks due to the increased complexity of the due diligence process.
Get more information
We are a leading medical factoring company and can provide you with competitive pricing. For more information, get an online quote or call us toll-free at (877) 300 3258.
If you are looking for a medical factoring company, consider reading “How to Find the Best Medical Factoring Company?“