Essential Information Regarding Health Care Advances
A common difficulty that fledgling medical practices face is uneven cash flow. Payments from private insurance companies are often delayed anywhere from one to three months, while salaries, rent, and medical supplies require outlays of funds on a regular basis. One possible solution is a cash reserve, but it’s not often easy for new health care businesses to build and maintain such a reserve. Among the most viable of health care advances is financing with medical factoring.
Basics of Medical Factoring
Medical factoring is a method of financing that ensures working capital to offset tardy medical insurance claims. The factoring company purchases your accounts receivables and supplies you with revenue with which to carry on your medical practice. To qualify for the health care advances of medical factoring, your company must have no serious tax problems, be free of liens, and regularly bill private insurance companies, Medicare, or Medicaid.
How Medical Factoring Works
Soon after your claims are approved, the factoring company advances you the first installment, which generally amounts to 70 to 80 percent of the value of the claims. You receive the second installment of 20 to 30 percent, also known as the rebate, minus the financing fees, after the insurance companies have settled their transactions.
Benefits of Medical Factoring
Medical receivables factoring is a much quicker means of obtaining financing than traditional loans or lines of credit. You can obtain the funds you need in as little as a week or two from when you first apply. It’s also easy to qualify for this method of financing. It dramatically improves cash flow for businesses that are running short of resources. Additionally, the line of financing is adaptable to your business growth, making more funds available to you as your practice expands. This enables you to grow further by adding employees, locations, and services.
For more advice on health care advances such as medical receivables factoring, get in touch with AMZA Capital.