For most dental practices, cash flow problems can be traced to one thing: the lag time between issuing invoices and getting paid. Between waiting on remittance from insurance providers and patients alike, many dental practices believe their only recourse is to take out a bank loan to cover business expenses until payments start to arrive. However, dental patient financing offers an alternative solution for cash flow problems.
The Bank Loan Myth
There was a time when taking out bank loans to float business expenses was a normal practice. But after the last downturn in the economy, many dental practices have begun thinking differently. Bank loans provide a short-term solution, but also place debt on the balance sheets, and lock dental practices into a payment schedule. When the loan money is used to meet payroll, pay off vendors, and other regular expenses, the debt from the loan still remains. Additionally, the payment schedule on bank loans must be adhered to, regardless of revenue. All of these factors can threaten to land a practice back at square one, except with more cash flow problems than simply waiting on payments from patients.
How Patient Financing Works
Dental patient financing offers a budget-friendly payment option which spreads the cost of invoices over monthly installments. The payments customers make are based on their personal credit scores, and the entire application process can be completed in a few minutes. Dental patient financing is easy to implement. An individual applies for patient financing, and someone at the dental practice calls the financing company and relays the customer’s relevant information. The financing company then performs a credit check and figures out the amount the patient has to pay.
Everyone Benefits From Dental Patient Financing
With dental patient financing, your practice will see regular and expedited payments, rather than waiting the full aging period on the invoices before seeing money, or having to resort to collection services. On top of this, your practice will be able to offer special deals to patients, such as “no interest for the first six months” or “no upfront cash for approved applicants.” Incentives like these can quickly grow you patient base, and by extension, your revenue. Offering dental patient financing also grows your practice’s reputation as a “budget friendly” establishment.
If you would like to learn more details about dental patient financing, call the Lavan Financial Group at 203-308-4547.