Many healthcare companies run into trouble when it comes to getting paid. It can sometimes take 30 to 120 days before payment is received. These slow payments can create significant cash flow problems, especially for new and fast-growing companies. Medical factoring is a feasible solution because it can prevent cash flow problems caused by slow payments.
Bridge the Gap
Medical factoring is a respected type of financing often used by healthcare providers, specialists and medical professionals. That is because they often must send their bills to slow-paying insurance companies and organizations like Medicare and Medicaid. Medical factoring is a way to receive faster payments for medical and medical-related bills.
Selecting the right medical factoring company for your business can help keep your healthcare company financially healthy. Here are steps to make sure you find a factoring company that works for your business.
Understand Medical Factoring Basics
Transactions for medical factoring are usually straightforward, but it can help to know what to expect from the start. Medical businesses sell and assign their claims to the factoring company. The finance firm then advances money for the claims and holds onto the claim until it matures. The transaction is complete when the insurance company pays the claims. The factoring company usually advances up 80% to 90% percent of the claim and rebates the outstanding 10% to 20%, minus financing fees.
Select a Medical Factoring Company that Meets Your Needs
Finding the right medical factoring company will largely depend on your specific needs. Most of these factoring companies specialize in certain areas. For example, they may be experts in working with small companies. Or they may be specialists in particular types of healthcare businesses, like surgery facilities, hospitals, or medical supply companies. You should also know that although many factoring companies can process Medicare and Medicare, some do not.
Our Financial Experts Are Ready to Help
A medical factoring company can ensure your medical company continues to thrive as it grows. If you have questions about how it can help your business succeed, be sure to contact Capital Finance Partners.