Is Medical Factoring Right for your Medical Office
Below is a MRR and PLR article in category Business -> subcategory Management.
Is Medical Factoring Right for Your Medical Office?
Discover How to Improve Cash Flow with Medical Factoring
Are you tired of waiting up to 90 days for insurance and Medicare/Medicaid claims to be paid? Learn how medical factoring can enable you to receive payments in just two days.
Understanding Medical Factoring for Your Practice
As your medical practice grows, cash flow issues are inevitable. This is a common challenge across all industries, not just healthcare. Many medical offices initially consider business loans or lines of credit to manage these issues. However, loans have limitations: they can be hard to secure and come with maximum limits. If your practice expands rapidly, you risk outgrowing your loan, which can complicate matters since you must pay off the existing loan before obtaining a new one.
Why Medical Factoring Could Be a Better Solution
Medical factoring offers an alternative by accelerating payment times from the standard 60-90 days to just 2-7 days. This rapid turnaround can be crucial if slow claims payments are affecting your ability to:
- Make payroll
- Pay rent and other essential expenses
- Make critical hiring decisions
Benefits of Medical Factoring
Medical factoring provides several advantages:
- Immediate funds to cover payroll
- Resources to pay rent and vendors
- Financing proportional to your billings: the more you bill, the more financing you receive
Unlike business loans, medical factoring is easier to qualify for. The primary requirement is that your office must be current on taxes and free of any tax or commercial liens. Setting up an account usually takes about 10 days, with subsequent fundings occurring within 24 hours.
How Medical Factoring Works
1. Submit claims to your insurance companies and send a copy to the factoring firm.
2. The factoring company advances 70%-85% of the expected net collections.
3. Receive immediate funds while the factoring company waits for payment.
4. Once payment is received by the factoring company, the transaction is settled.
By leveraging medical factoring, you can efficiently streamline your practice’s cash flow, ensuring that financial hurdles don’t impede your growth and operations.
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