If you are running a medically related business such as medical supplies to doctors or hospitals or running a clinic, then you must be aware that although sales have improved, margins are under pressure and the waiting period to collect pending payments are increasing day by day. Also with the advent of Medicare and other insurance companies making the payments after completing their assessment, the wait for payments has increased to around 120 days and that could hamper your cash flow and hence your growth. You could approach a bank for your needs but that would require endless paperwork, collateral and lots of time. You would also have to pay a fixed percentage of interest on that loan amount. Here is where medical factoring could be a lifesaver to your business. Here is how it works.
Normally when you sell your items to doctors or hospitals, you make a sales invoice or you put up a claim to insurance companies or Medicare or Medicaid to claim for services provided. You can “Sell” your sales invoices issued to various reputed doctors, clinics or hospitals and even your claims to insurance companies to your factoring company. The factoring company then electronically transfers the invoice amount in 2 installments in the following way. The first installment is usually 60 to 85 percent of the invoice amount and this amount is transferred to your account in 24 to 48 hours. The second amount, also known as the “reserve” amount, is transferred minus the factoring company’s fee when the full invoice amount is received from your customer or insurance company.
The factoring fee is usually between 1.5 to 15 percent of the invoice value, depending on the rating of your customer or insurance company as decided by your factoring company, the number of days of credit given, and the monthly invoice totals i.e. the volume of sales and claims. Your factoring company might also take care of collecting the payment from your customers and they can send you regular statements of the payments collected from your customers and the pending receivables statement. This can free up your collection department and you can utilize your time and their services in a different way. The more your value of receivables, the lower the rate of commission!
Getting most of your invoice amount immediately also improves your cash flow and that money can be utilized in paying off salaries, suppliers and even in making bulk or cash purchases, which could give you a better profit margin. You can also execute large orders from hospitals without having to worry about your money getting locked during the credit period. If you have a testing or diagnostic center, then you can invest in new medical equipment. You could even hire more staff to increase your business.
Find a matching medical factoring company through a reputed factoring broker or even through the Internet. The medical factoring company should be able to provide you prompt service and should also be efficient and courteous while collecting payments from your customers or insurance companies. Since many of them also take care of bad debts, you will also have to worry less about collection of payments and bad debts. This will help in taking your medical business to a new high.

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You have a great relationship with nurses, medical transcription services, medical coding services, medical supply companies, etc. Clients from hospitals, nursing homes and many different areas that medical staffing is needed but cash flow issues can affect you daily. Factoring medical staffing receivables solves the cash flow problems created when your medical staffing business has growth opportunities that exceed its ability to finance.Factoring is not a SBA loan or a bank loan, but is a way of financing your account receivables without you having to qualify. Where a bank loan can take you up to 3 to 4 months to take out, factoring can be done in as little as 3 days. Factoring Medical gives you both the immediate cash and an ongoing source of working capital. Helps you control your operating expenses as well as seasonal cash flow fluctuations that can occur.Fact: Each Practice or Business is unique.Fact: Medical Staffing is different than Hospital Insurance needs.Therefore each should be carefully analyzed and then have a customized financial solution created to match those unique needsSome have the need for cash flow to help them grow the business or update equipment or deal with delayed payments. Others need off balance sheet financing, others need bridge financing and others need tax relief. By focusing on the unique needs in each situation medical factoring company can deliver the financial needs you are looking for to help you.The goal of a good factoring company is simple, to help your business growing with the cash needs you have. If you are serious about increase sales and expanding your business, contact http://www.FactoringMEDICAL.com and find out the many ways factoring medical receivables can help you and your business grow.Daniel Doane http://www.FactoringMEDICAL.com

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There are few bigger pains for healthcare industry professionals than having to wait 30, 60 or even 120 days to collect payments from insurance companies, HMOs and Medicare/Medicaid. The healthcare industry is riddled with complex billing, coding and processing rules that create very long payment cycles. This can be very difficult for medical offices, testing and diagnostic centers, medical supply companies, or any healthcare related business, for that matter. There are always many ongoing expenses that can’t wait. There is rent that needs to be paid, offices expenses that need to be covered, and payroll that must be met.

This situation creates a problem for most healthcare businesses. On paper, the business may look very profitable and seem to be doing well. But in reality, most of the money is tied up in slow paying invoices (also known as accounts receivable) with little cash to show for it in the bank.

When faced with tight cash flow, most healthcare professionals turn to their bankers. Medical doctors can usually qualify for signature loans or lines of credit. Other business professionals are not so lucky. In reality, a loan or line of credit may help you in the short term, but will not solve the main problem. Why? Well, loans are good for buying equipment or large capital expenditures, but not for covering recurring and ongoing expenses. A line of credit is a better solution, but they usually have fixed limits. What happens if the business grows past the limits of the line of credit? Many healthcare professionals usually find out, the hard way, that the bankers that were quite happy to extend the first loan or line of credit will not be so helpful at increasing it. Unfortunately, bankers absolutely hate it when businesses came back to the well for more money.

If you look at the problem at hand, you will soon realize that the perfect solution should have the following characteristics. First, it should be able to accelerate your insurance payments so that you can get them quickly rather than slowly. Second, the solution should be able to grow with your business. So, if your business grows its billings, the solution should be able to adapt the financing it delivers, seamlessly. Third, the solution should allow you to finance significant growth. Maybe three to five times your current revenues – or more.

There is a solution that meets these criteria and is available to the healthcare industry. The solution is to factor your medical receivables using a financing tool called medical factoring. Medical factoring allows you to accelerate your payments from insurance companies, HMO’s or Medicare/Medicaid. It enables you to receive a substantial amount of your net collectables within days of billing, streamlining your cash flow dramatically.

Medical factoring, a specialty form of general factoring, allows you to sell your claims and receivables to a factoring financing company. The factoring company buys them – at a small discount – and pays you with immediate funds. The factoring company waits to be paid while you get to use the funds to meet business expenses. As opposed to traditional banking financial products, medical factoring has no arbitrary limits. You can factor or sell as much revenue as you can generate, making it the ideal financing tool for growth.

However, factoring is not the best solution for every situation. It works best in instances where your main challenge is that you cannot afford to wait to get paid in 60 to 120 days. It helps you meet ongoing and recurring expenses such as rent, payroll and lease payments. Medical factoring is an ideal solution for medical offices, rehabilitation centers, medical testing and diagnostic centers, medical supply companies and small to mid sized hospitals.

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Medical supply companies in general are very profitable enterprises. However, most medical supply companies operate on a very tight cash flow. Unfortunately, the challenging billing procedures and slow payment cycles of insurance companies, HMOs and Medicare/Medicaid create a situation where many companies wait 30 to 60 days before getting paid.

Cash flow can get even tighter if the company’s sales grow, or if the owners decide to open new locations. When this happens, most company owners try to obtain bank financing through a loan or line of credit. However, qualifying for bank financing is incredibly challenging as they will only lend money to a business that shows profits for three straight years and can provide audited financials.

There is a financing alternative in the healthcare industry that has been used with success with medical supply companies. This solution provides you with quick financing based exclusively on your sales. Furthermore, since financing is tied to sales, the line of financing grows as your sales grow. The solution is to factor your medical insurance claims using medical receivables factoring.

Medical factoring provides you with immediate financing based on your slow paying insurance and Medicare/Medicaid claims. Rather than waiting 30 to 60 days to get paid, with medical factoring you can get paid in a few days. This frees up significant cash, allowing you to finance operations, and more importantly, to buy supplies and fuel new sales.

As opposed to bank financing, where the bank lends you money, the factoring company buys your invoices and pays you immediately for them. The process is fairly straightforward. But more importantly, this also means that you are free from the traditional bank lending requirements. Medical receivables factoring is easier to qualify for, and often, the owners’ personal credit is not a consideration.

Factoring your medical receivables can be an ideal solution for your medical supply company if your main challenge is that you cannot afford to wait up to 60 days to get paid by insurance companies. If that is the case, medical factoring should provide you with the working capital you need to operate and grow your business.

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