Invoice Factoring for Medical Providers
Medical providers that bill Canadian Medicare, private insurance companies, and other large payors may wait weeks or months after providing care before the bill is paid. Meanwhile, the facility must continue paying employees, covering overhead, purchasing supplies, and managing various other expenses related to delivering quality patient care. It’s a difficult spot to be in, and something as simple as an uptick in the cost of supplies, influx of patients, or unexpected bill can make it impossible to make ends meet.
Factoring eliminates your wait for payment by providing you with immediate payment. You’re in control of which invoices you factor and when you factor. As the need arises, you just send your unpaid invoice to your factoring company. They’ll send you a lump sum for most of the invoice’s value right away. When the payor takes care of the balance, you receive the remaining cash minus a nominal factoring fee.
Types of Medical Providers That Use Invoice Factoring
Just about any medical provider that bills the government or large companies can use invoice factoring. A few common examples include:
Medical Equipment Companies
Physical Therapy & Rehabilitation Centers
Physicians & Physician Groups
Invoice Factoring for Healthcare-Related Businesses
As a business supporting the medical industry, you rely on prompt payments to continue your important work. Yet, medical providers are often slow payers, and many have long invoice approval processes on top of it. This means you might wait months for an invoice to be paid even though you have your own payroll and operating expenses to keep up with.
Invoice factoring for the healthcare industry can help you too. If you’d like to accelerate payment on any of your receivables, just submit the unpaid invoice to your factoring company. You’ll get most of the invoice’s value right away. When your client, the medical provider, pays their invoice, you’ll receive the remaining sum, minus a small factoring fee.
Types of Healthcare-Related Businesses That Use Invoice Factoring
Approval for factoring largely depends on your clients’ creditworthiness, so most healthcare-related businesses that serve strong and established businesses are approved. A few examples of businesses that leverage healthcare factoring include:
Healthcare Staffing Agencies
Medical Billing Companies
Medical Supply Companies
Medical Transcription Services
Benefits of Invoice Factoring for Healthcare Companies
Invoice factoring works differently than any other funding solution, so the benefits your business receives are unique too.
How Healthcare Factoring is Used
There are no rules on how you spend your cash, so you can apply it wherever it makes the most sense for your business. Businesses in the medical industry often use their cash for:
Bank Loans vs. Invoice Factoring for Healthcare Companies
When you get a bank loan, any personal attention you receive is stacked at the front of the relationship. Once you’ve signed, your relationship is mostly just keeping up with your payments. Conversely, a factoring company is more like a long-term partner. When you work with an invoice factoring company specializing in healthcare, you’ll find that they become invested in your success from day one and can help ensure you have the resources necessary to grow.
Healthcare Invoice Factoring is Different
The funding process is completely different with invoice factoring than with a loan. Some key differences you’ll notice include:
Easy Qualification: Most businesses get approved for factoring, even those without a strong credit history and newer businesses. As long as your clients are creditworthy, you’ll likely be approved.
Quick Approval: You can be approved for factoring within a day or two if you have common financial documents available.
Fast Funding: The speed of funding is largely up to you. Most factoring companies pay by ACH, which means cash will hit your account within about two business days. However, some offer accelerated payment and can pay you on the day you submit your invoice. Either way, it sure beats bank timelines!
Debt-Free: Most funding solutions create debt you must pay back with interest. With factoring, your client pays the balance when they pay their invoice. That way, you have nothing to pay back, and you’re always moving forward.
Greater Flexibility: Again, you’re in control with factoring. It’s there when you need it and can cost nothing when you don’t.
Leverage Value-Added Services to Strengthen Your Business
Another thing that distinguishes factoring companies from banks is their dedication to service. Depending on the factoring partner you select, you may be able to receive the following:
Credit Checks: Know the creditworthiness of your clients before you extend trade credit to minimize your risk. Invoice Preparation: Free yourself from tedious back-office processes and focus on running your business while your factoring company prepares invoices.
Collections: Keep your customers happy with white-glove service and streamlined payment options, all while accelerating payment and reserving your resources for core operations by allowing your factoring company to manage collections for you.
Explore Additional Funding Solutions for Your Healthcare Business
Your funding needs are likely to change over time and as you grow. Once you’re established with a factoring company, you may also qualify for the following:
Request a Free Medical Factoring Quote
If it sounds like healthcare factoring is your ideal cash flow solution, take the next step and get a free rate quote.