Healthcare staffing agencies qualify for healthcare factoring by meeting five core requirements: creditworthy healthcare clients, verifiable timesheets, completed invoices, clean UCC status, and basic business documentation. This guide explains each requirement in detail and provides a complete 2025 checklist you can use to prepare for approval.
What Healthcare Factoring Requires in 2025
Healthcare factoring is a financing method where a staffing agency receives 80–95% upfront cash on unpaid invoices submitted to hospitals, long-term care facilities, and MSPs. Approval is based primarily on the credit strength of your clients, not the age of your business or your credit score.
You qualify for healthcare factoring if:
- You bill creditworthy healthcare facilities.
- Your clinicians submit verifiable timesheets.
- Your invoices reflect completed work.
- Your business documentation is in order.
- Your receivables are free from conflicting UCC liens.
According to the International Factoring Association (2024), healthcare staffing is one of the top three industries approved for factoring because of predictable invoice cycles and high demand for clinical staff.
Step 1: Confirm You Serve Creditworthy Healthcare Facilities
Factoring approval depends heavily on the financial strength of your clients, not your agency.
Healthcare facilities considered strong credit risks include:
- Hospitals
- Long-term care (LTC) centers
- Skilled nursing facilities (SNFs)
- Rehabilitation centers
- Behavioral health facilities
- Government medical facilities
- MSP/VMS programs
Your factor will run credit checks on each healthcare facility.
You qualify if your clients have good payment history and stable financials.
You’ll know this worked when:
Your factor confirms your clients’ credit is sufficient for funding.
Step 2: Verify Your Invoices Are Earned and Verifiable
Factoring companies require invoices that meet two criteria:
1. The work must be completed
Factoring cannot advance funds for future shifts.
2. The work must be verifiable
You must be able to confirm:
- Clinician hours
- Facility approval
- Timesheet signatures or digital verification
- MSP portal time logs (if applicable)
Why this matters:
Healthcare facilities frequently require documented confirmation before paying, so factors must ensure accuracy.
You’ll know this worked when:
The factor approves your timesheet verification process.
Step 3: Show Proof of Completed Timesheets
Your timesheet process must be:
- Accurate – no manual errors
- Timely – submitted weekly
- Verifiable – signed or approved digitally
According to Kronos Workforce Institute (2024), timesheet accuracy reduces payment delays by 3–5 days, which directly improves funding speed.
Most factors accept:
- Signed physical sheets
- Digital timekeeping systems
- MSP time-approval logs
- EMR or badge-swipe reports (facility dependent)
You’ll know this worked when:
Your factor accepts your timesheet verification workflow with no required changes.
Step 4: Provide Basic Business Documentation
All healthcare factors require the following documents for underwriting:
Required Documents (2025)
- Articles of incorporation
- EIN confirmation letter
- Driver’s license for all business owners
- Voided business check
- Current A/R aging report
- Sample timesheets
- Sample invoices
- Client list (names + locations)
- Contracts or agreements with facilities
- Completed factor application
Optional/Helpful Documents
- Workers’ compensation declarations
- Payroll reports
- MSP vendor setup documents
- W-9s for all clinicians (if 1099 model)
You’ll know this worked when:
Your underwriter confirms all documents are complete.
Step 5: Pass a UCC Search
A UCC (Uniform Commercial Code) search identifies liens on your receivables.
You must pass the UCC test if:
- No other lenders have claims on your invoices.
- You are not using invoice financing already.
If you have an existing UCC filing:
Most factors can assist with:
- UCC subordination
- UCC termination
- UCC payoff agreements
In 2025, most approvals are delayed because new staffing agencies unknowingly have broad UCC filings from banks or online lenders.
You’ll know this worked when:
Your factor confirms the UCC is clear or successfully subordinated.
Step 6: Review the Factor’s Advance Rates and Fees
Before signing, understand:
Advance Rate
Healthcare staffing advance rates range from 85–95%.
Fees
Common structures include:
- Flat fees (1–4%)
- Tiered/tenor-based fees
- Monthly minimums (varies by provider)
- Wire fees / ACH fees
Additional Services
Some factoring companies include:
- Back-office support
- Invoice verification
- Vendor portal management
- Collections follow-up
- Credit monitoring for healthcare facilities
You’ll know this worked when:
You understand the pricing structure with no uncertainty.
Step 7: Sign the Factoring Agreement (Final Step)
Once approved:
- Your account is set up
- A notice of assignment is sent to your healthcare clients
- You begin submitting invoices
- You receive funding in 24–48 hours
The entire onboarding process takes:
- 24–72 hours for staffing agencies with clean documentation
- 4–7 days if UCC issues require resolution
You’ll know this worked when:
You receive your first cash advance.
Healthcare Factoring Approval Checklist (Printable)
Business Documentation
✔ Articles of incorporation
✔ EIN confirmation
✔ Driver’s license (all owners)
✔ Voided business check
✔ Completed factor application
Accounts Receivable
✔ Current aging report
✔ List of healthcare clients
✔ Sample invoices
✔ Sample timesheets
Verification Documents
✔ Timesheet approval process
✔ Signed or digital timesheets
✔ Contracts with facilities
✔ MSP/VMS setup details
Compliance & UCC
✔ Workers’ compensation documentation
✔ Clear UCC search
✔ Subordination/termination if needed
Underwriting
✔ Client credit check completed
✔ Terms accepted
✔ Advance rate confirmed
