Businesses that work in the healthcare industry are subject to slow-paying customers. Most people pay for their medical services through insurance, and because insurance companies can take months to finalize paperwork, proper budgeting is made difficult for healthcare businesses. If your business experiences disruptions in cash flow due to slow or inconsistent payers, medical financing might be your saving grace. The specific type of factoring you can use depends on what your role is in the healthcare industry.

Financing for Healthcare Entrepreneurs

Healthcare factoring is available to those who provide a service for healthcare facilities. This includes vendors such as staffing agencies, medical supply companies, and transportation businesses. These businesses will send their invoices to the healthcare provider they provided services for and to a medical factoring firm. Then, they can receive advances of up to 90% of the invoice value from the firm. This process is generally quick, and businesses can expect to receive a boost to their cash flow within 48 hours. Once the invoice is paid off by the customer, the business can receive the remaining 10%, minus associated service fees.

Financing for Medical Providers

Medical receivables factoring is best suited for medical providers that need to level out their cash flow in between payment times. This is a popular form of financing for hospitals, private practices, and any healthcare facility that works with insurance companies or other third-party payers. The factoring process functions very similarly to healthcare factoring. The only difference is that the medical provider bills the third-party payer rather than the customer that received the services. It may also take a little longer to receive funds from medical receivables factoring. Generally, a medical provider can expect to receive funds within 72 hours.

Qualifying for Financing

Qualifications for healthcare factoring are quite minimal. Virtually any business, large or small, can use medical factoring to help increase or balance out their cash flow. For medical receivables factoring, healthcare facilities need to receive at least $40,000 worth of invoices per month. Additionally, they’ll need to be at least three months in business.

Medical financing is a quick, easy, and popular practice. If you provide goods or services to a healthcare facility, or if you have to work through slow-paying third parties, medical financing may provide you with the steady cash flow you need to keep your business running optimally. Discuss your options with your medical factoring firm if you have questions.