For small to medium-sized healthcare companies, cash flow balancing is tough. It’s even more difficult if your business works with large medical corporations who pay every 30, 60 or 90 days when your company runs payroll biweekly. What if there was a way to make payroll and pay other business expenses without taking out a line of credit or going into debt? There is; factoring. The benefits of medical factoring go beyond simply balancing cash flow – take a look.
How Medical Factoring Can Benefit Business
- Provides a simple, fast funding solution without debt
- Helps balance and maintain cash flow
- Provides back office support if requested
- Improves credit
- Unlimited funding potential (growth)
Breaking it down:
Fast Funding Solution Without Debt
The most recognized benefit of medical factoring is that it provides access to fast funding without debt or collateral.
Factoring is the process of selling unpaid invoices in exchange for a cash advance. Because of this, companies do not have to take out a bank loan that they must pay back with interest or put down assets as collateral. The party responsible for paying back the factor is your clientele.
This brings up another point: perfect credit isn’t a need to qualify since your clients are the ones paying back the factoring company. However, the better your clients’ credit is, the more likely you will be able to factor (have better rates, etc).
In addition to being easy, factoring is also fast. Most companies who factor get paid in less than 24 hours after approval.
Balance and Maintain Cash Flow
Between paying everyday business expenses and making payroll, cash flow can often run thin. Instead of relying on bank loans or dipping into personal funds to keep your business running, consider medical staffing factoring. As long as your company has a source of continuous invoices, you have access to capital
Another benefit of medical staffing factoring is that since your business no longer has to worry about overdrawing accounts to pay the bills, you can focus on other things like marketing or expansion. You can spend focusing on bettering your organization and less on bookkeeping, administrative work and talking with.
Medical staffing factoring also allows your business to offer extended credit terms to your customers. The more contracts you can complete, the more work you will get.
Back-office Support
One of the little-known ways how medical factoring helps businesses is by offering back-office support for companies who request it. Factoring companies can provide certain services for your business, like invoice processing and collection, so you don’t have to. Plus, when working with a factor, the overhead cost related to processing invoices is greatly reduced.
By taking advantage of the back-office support facet of factoring, you free up more time to do other, more important things for your company.
Improves Credit
Factoring medical staffing receivables helps your business balance cash flow, which in turn allows you to pay vendors on time, therefore giving you a better credit rating. For qualified cases, PRN Funding offers non-recourse factoring options which can help eliminate bad debt by assuming liability.
Most factors offer early payment discounts as well. This means that if bills are paid within ten days, up to two percent of cost is reduced. Many businesses report the discount of paying early allows them to use factoring services at little to no cost.
Unlimited Funding Potential
One of the most underrated and often unknown benefits of medical staffing factoring is that it offers your business unlimited funding potential. This allows you to grow your company without the worry of running out of capital midway through.
Unlike other traditional forms of lending, factoring relies on the delivery of unpaid invoices and their subsequent payment by your clients. As long as you are securing and completing work, funds will be available to you through factoring.
Medical receivables factoring is a simple, fast way for your company to get the capital you need to run smoothly. While factoring has been around for ages, it is still a practice many are unaware of.
If you’re still unsure of what factoring is or if your company qualifies, read on.
What is medical factoring?
Medical factoring is the process of selling your accounts receivables in exchange for capital.
What makes a business eligible for medical factoring?
While eligibility is dependent on several different factors, the main qualities of a factorable business are:
- Your company sells to other businesses, not consumers.
- The company has unpaid invoices.
- Your company provides goods or services to a credit-worthy customer.
How can I use the funds from medical factoring?
Your company can use the funds from medical factoring for any business expenses. This is your money, factoring just gives it to you faster.
Will my customers know I’m factoring?
Yes, your customers will be alerted that you are factoring. But, that’s not a bad thing! Factoring is used by businesses far and wide, large and small. More information can be found on our customer reaction to factoring page.
If you’re curious about the benefits of medical staffing factoring…
Contact us by either calling or filling out a free, no-obligation online form. Our factoring specialists will walk you through the process and help you decide if medical receivables factoring is the best solution for your business’s cash flow needs.
