Many medical practices suffer from a skewed revenue to expenses ratio. The truth is that a good portion of balances on patient accounts go unpaid, or trickling in after a slew of reminders are sent out – leaving practices to draw on their own cash reserves to cover expenses, or go deeply into debt with bank loans for working capital. Recently, practices have been turning to financing their own medical receivables to get access to the capital they need, without having to play the waiting game for payments from patients.
Financing Medical Receivables
By working with a commercial finance company, medical practices can sell their unpaid patient invoices for working capital. The agreements can be drawn up in 48 to 72 hours, and funding is made available in 24 hours after an invoice is submitted. This allows medical practices to catch up on all of their outstanding patient accounts, plus it gives the capital needed to cover expenses and grow the business. Patient invoices can be submitted in one large batch to catch up on backdated accounts, or they can be submitted as they are generated for patient services.
Patients Still Need To Pay
Only certain commercial finance companies offer financing on medical receivables because they have the resources to cover the dollar amounts on the bills. Once the invoices are submitted, the finance company then becomes responsible for getting payment from the patients. This reduces the amount of time and resources used by your practice’s accounting department to track multiple patient accounts, because all revenue will be coming from the finance company. Instead of sending out reminders and making phone calls to patients with outstanding balances, the accounting department will be able to cover expenses, enjoy a healthy and steady cash flow, and focus on growing the practice.
Medical Receivables Financing Is Not A Loan
Unlike traditional bank loans, this type of financing does not require a credit check, nor does it have a strict payment schedule. Most importantly, it does not place any debt on the balance sheets. This service lets your practice get the revenue it is owed, without having to wait for payments from patients, and without needing to resort to collection agencies.
If unpaid patient invoices are placing a strain on your cash flow, or you would like to expedite revenue from your medical receivables, call the Lavan Financial Group at 203-308-4547. We work directly with medical practices in Connecticut and across the country to get them the financing they need quickly, without having to get caught in the red tape of traditional lending channels.