| Although many experts speak of gloom and doom in | | | | pay the invoices.Factoring has advantages over loans |
| the medical industry, the fact is that this industry keeps | | | | and lines of credit. First, factoring financing lines do not |
| growing by leaps and bounds. Every year, the demand | | | | have arbitrary limits. The maximum amount of monthly |
| for medical services, medical testing (e.g. MRI Centers, | | | | financing is solely determined by your ability to invoice. |
| Testing Centers, etc) and medical supplies keeps | | | | If your business grows, your financing grows |
| getting stronger. This trend is expected to continue as | | | | automatically. Also, factoring companies don't require |
| the population ages.However, even though the growth | | | | the same collateral that banks do, so new businesses |
| trend looks good, running a medically related business | | | | or doctors' offices can usually qualify easily.How does |
| keeps getting more and more challenging. In the past, | | | | factoring work? The process is fairly simple. Once an |
| doctors and medical suppliers could expect to get | | | | agreement is established with a factoring company, it |
| large and quick reimbursements for their services. | | | | works as follows:1. Your office submits your weekly |
| Cash flow was reasonably easy to manage. | | | | (daily or monthly) billings to the insurance company and |
| However, Medicare, Medicaid and 3rd party insurance | | | | to Medicare/Medicaid. (note: sometimes this task can |
| companies have put in place strict compensation | | | | be handled by the factor on your behalf)2. Your office |
| guidelines. These guidelines can be summarized in two | | | | sends a copy of the billings to the factoring company.3. |
| simple points: you can look to receive less money than | | | | The factoring company advances you up to 85% of |
| before and you should be prepared to wait longer to | | | | Net Collectables within 48 hours. Funds are sent by |
| get paid.This creates a financial "perfect storm" for | | | | wire or direct deposit. The remaining 15% is called a |
| medical industry companies. On one hand, you are | | | | "reserve" and used to settle billing discrepancies at |
| getting paid less and waiting longer for your money. On | | | | time of payment. This is returned to you once the |
| the other hand, your operating expenses remain the | | | | invoices are paid.4. The factoring company waits to be |
| same or perhaps are higher. You still need to pay your | | | | paid by the insurance company or Medicare |
| employees and your suppliers. In almost all cases, this | | | | Medicaid.5. Once the factoring company is paid, they |
| limits your ability to pursue new opportunities and grow | | | | settle out the transaction and rebate you the remaining |
| your business. In some cases, it may even threaten | | | | 15%, less their fee.The advantage of |
| your ability to continue to operate your business.Is | | | | factoringFactoring is ideally suited for medical offices |
| there a way to "fix" the cash flow problem?If your | | | | and testing centers that are growing quickly and |
| business's main cash flow problem is not being able to | | | | cannot afford to wait the usual 30 to 90 days that it |
| afford to wait 30 to 90 days to get paid by insurance | | | | takes to be paid by insurance companies or Medicare. |
| companies and Medicare, then factoring your invoices | | | | It can provide you with ongoing financing, streamline |
| could be the right solution for you.The factoring | | | | your cash flow, and most of all, relieve the stress of |
| proposition is very simple. Factoring is a way of | | | | not knowing when you'll be paid.Copyright © 2005 |
| financing, in which a factoring company provides you | | | | Commercial Capital LLC All rights reserved. This article |
| with advance payments based on your outstanding | | | | may be reprinted, provided the resource box is |
| accounts receivable (or invoices). You get funding as | | | | included with live linksInvoice Factoring Group |
| soon as you invoice. The factoring funds it and waits | | | | Invoice Factoring Group ( can provide you with a free |
| to get paid until the insurance companies or Medicare | | | | medical and doctor office factoring quote. |