What is Medical Receivables Factoring?
Medical receivables factoring allows healthcare providers to sell their outstanding accounts receivables for an immediate influx of cash.
Besides needing funds for operating expenses and working capital requirements, providers in the healthcare industry are constantly challenged by changes in technology and other demands on their capital allocations. Unlike traditional lenders who offer companies secured loans with their accounts receivables, this type of funding removes the burden of repayment from companies and puts it on their debtor.
How Does Medical Receivables Factoring Work?
Receivables factoring for healthcare is the selling of outstanding accounts receivables from a healthcare provider to a lender. Once purchased, the lending company—such as Factor Funding—will send funds at an advance for 70-95% of their value. Once the receivables are paid, Factor Funding will send the remaining value minus a small factoring fee. This helps healthcare providers maintain a steady cash flow to pay expenses needed for daily operations and not be slowed down unnecessarily.
The Challenges Healthcare Providers Face:
Dwindling reimbursement rates
Difficulty accessing needed financing
Our Clients Use Medical Receivables Factoring to:
Replenish working capital
Expand their businesses
With medical receivables factoring, the money a healthcare provider elects to receive on a weekly, biweekly, or monthly basis will come with no strings attached.
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Medical Receivables Factoring Process
Complete and submit a medical receivables factoring application to a company like Factor Funding to see if you qualify.
Your request will be reviewed and a representative will contact you to discuss your status and options.
Once approved, arrangements will be finalized.
You will then send the outstanding accounts receivables you agreed to sell in the agreement document.
Factor Funding advances a portion of the value of each account received.
You use the funds to run your day to day operations and for any other business needs.
Factor Funding collects the invoice and payment from each account.
Factor Funding forwards the balance of your profits—minus a small fee to you.
Once you have qualified for our service, your next factoring request will be available even faster.
Medical Receivables Factoring
Funds are available to healthcare providers with at least $100,000 in net monthly receivables payable by any of the following:
State workers’ compensation insurance companies
Managed care agencies
State and local government contracts
To complete our medical receivables factoring application, we may ask for some or all of the following:
- Articles of Incorporation or Assumed Name certificates
- Copy of applicants driver’s license and social security card
- Accounts receivable aging and invoices
- Copy of business/liability insurance
- Customer list
- Copy of contracts or purchase orders
- Copy of operating authority (MC#_______) (Trucking)
- Worker’s compensation insurance (temporary staffing firms)
- List of all jobs currently working on (construction)
- Federal Tax Identification #/W-9
Medical Receivables Factoring
Who uses factoring for receivables? Healthcare providers with outstanding accounts receivables who are struggling with cash flow shortages. This includes:
Diagnostic and Imaging Centers
Physical Therapy & Rehabilitation Centers
Home Healthcare Agencies