Invoice Factoring for Healthcare Companies

You’re in the business of saving or changing lives. Your mission doesn’t change whether your receivables are paid within five days or 50. And yet, slow payments make it much more challenging to ensure your patients or the medical teams you support receive the treatment they deserve. Invoice factoring for healthcare companies eases the strain by accelerating payment from large payors such as Canadian Medicare, private insurance companies, and other business entities, so you can focus on the essential work you do.

How Healthcare Factoring Works

Invoice factoring is leveraged in many industries. In a traditional arrangement, the business sells its unpaid receivables to a factoring company at a slight discount. The business receives most of an invoice’s value right away. Then, when the client pays their invoice, the factoring company remits the remaining balance to the business minus a nominal factoring fee.

Healthcare factoring works essentially the same. However, because there are medical providers who receive payments from Canadian Medicare and private insurance companies, as well as businesses that support the healthcare industries that receive payments from medical providers, there are a few minor differences.


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:

  • Addiction Care Centers
  • Behavioral Health Providers
  • Cancer Care Centers
  • Diagnostic Imaging Centers
  • Home Healthcare Agencies
  • Hospices
  • Hospitals
  • Labs
  • Medical Equipment Companies
  • Medical Offices
  • Nursing Homes
  • Pharmacies
  • Physical Therapy & Rehabilitation Centers
  • Physicians & Physician Groups
  • Surgery Centers

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

Provincial Healthcare Programs

Medical providers that bill the following provincial healthcare programs may qualify for factoring:

  • Alberta: Alberta Health Care Insurance Plan

  • British Columbia: Medical Services Plan of British Columbia

  • Manitoba: Manitoba Health Services Insurance Plan
  • New Brunswick: New Brunswick Health Care
  • Newfoundland and Labrador: Newfoundland and Labrador Medical Care Plan
  • Northwest Territories: NWT Health Care Insurance Plan
  • Nova Scotia: Medical Service Insurance
  • Nunavut: Nunavut Health Care Plan
  • Ontario: Ontario Health Insurance Plan
  • Prince Edward Island: Prince Edward Island Hospital and Medical Services Plan
  • Québec: Régie de l’assurance maladie du Québec
  • Saskatchewan: Saskatchewan Medical Care Insurance Plan
  • Yukon: Yukon Health Care Insurance Plan

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.

  • Flexibility: You’re in control with factoring. You can factor intermittently or factor all your invoices. You can factor once and then never again. You can sign up for factoring and then not leverage until needed.
  • Scalability: Factoring scales with you as your company grows.
  • Improved Relationships: Factoring takes the financial pressure off your relationships. You can give your clients or payors more time to take care of their balances and keep up with payments to your own vendors more easily.

  • Business Growth: With cash flow stabilized and funds available to invest in business expansion, factoring makes it easy to grow a stronger business.

    To see how much you could save or gain by leveraging invoice factoring tailored to your business needs, try our invoice factoring calculator.

Streamlining Cash Flow in Healthcare: The Role of Invoice Factoring

Managing cash flow efficiently is a critical challenge for healthcare providers and related businesses in today’s rapidly evolving healthcare industry. Invoice factoring emerges as a powerful solution, offering a seamless way to transform medical receivables and outstanding invoices into immediate working capital. This financial strategy benefits a wide array of service providers within the healthcare sector, from home healthcare agencies and medical equipment suppliers to nurse staffing and medical billing services.

Healthcare factoring companies specialize in receivable financing, enabling healthcare businesses to maintain steady cash flow by advancing funds against slow-paying accounts receivables payable by insurance companies, including Medicare and private insurance. By leveraging factoring services, healthcare providers can bypass the delays traditionally associated with insurance carriers and improve their ability to hire new staff, purchase medical supplies, and invest in expanding their facilities.

Unlike traditional loans or lines of credit, factoring is not a loan but a transaction where healthcare and medical companies sell their invoices to a factoring firm at a discounted rate, receiving an advance rate on the invoice amount. This process allows for quick funding today, eliminating the uncertainty of slow-paying customers and providing the much-needed financial stability and flexibility to grow within the healthcare industry.

Moreover, specialized factoring solutions, such as medical receivables factoring and healthcare invoice factoring, address the unique needs of medical providers by offering tailored financing for healthcare businesses. With a focus on medical accounts receivable financing, these factoring services ensure that healthcare facilities, including those providing critical services to the medical industry, have access to receivable factoring options designed to support their operational and financial health.

Factoring companies that specialize in the healthcare sector understand the intricacies of billing, medical coding, and the importance of maintaining a healthy cash flow for both healthcare facilities and service providers. By converting invoices into cash efficiently, healthcare factoring solves the cash flow challenges faced by businesses within the healthcare industry, allowing them to focus on their core mission of delivering exceptional patient care.

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:

  • Staffing: Invest in recruitment, cover payroll, or bring in temporary staff as needed.
  • Legal Requirements: Address licenses, training, insurance, or anything else required for legal compliance.
  • Equipment and Supplies: Stock up on supplies, purchase new equipment, or maintain your existing equipment.
  • Expansion: Market your business, reach new markets, open a new location, and more.

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.

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Factoring results estimation is based on the total dollar value of your invoices.
The actual rates may differ.


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Get an instant factoring estimate

Factoring results estimation is based on the total dollar value of your invoices.
The actual rates may differ.


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