Although invoice factoring is a great alternative funding option for any type of business, it’s an especially good allied health agency financing choice for agencies that staff temporary professionals in hospitals, clinics and nursing homes. In fact, selling invoices to a factor allows allied health staffing agencies to get paid quicker without going into additional debt. Furthermore, agency owners who factor their invoices will have enough liquid capital on hand to make weekly payroll and keep up with payroll tax obligations. Still not convinced? Check out the Three Reasons Why Allied Health Staffing Agencies Should Factor Their Invoices:
Reason #1: Stop Waiting to be Paid.
Instead of waiting 30, 60 or even 90 days to receive payment staffing in allied health professionals at a medical facility, temporary staffing agency owners can sell their invoices to a factor and receive cash within 24 hours of issuing an invoice. All a factoring firm needs to advance cash is a copy of the invoice and proof that the employees worked the shifts listed on the invoice. This is easily accomplished by supplying copies of signed time sheets.
Reason #2: Leverage the Credit of Your Customers.
Allied health agency funding is a great option for companies who are either just getting started, have less-than-perfect credit or are going through a growth spurt. Rather than make a credit decision based off of the staffing agency’s credit or the business owner’s personal credit, allied health agency funding firms determine their credit limits after reviewing the payment trends of the agency’s customers. This is usually done by using a third-party credit bureau, and it’s done in a non-intrusive way, giving companies the ability to secure allied health agency financing based off of their customers’ credit rather than their own.
Reason #3: Avoid Additional Debt.
Unlike traditional lending models, allied health agency financing is not the same as a business loan. An allied health agency does not borrow money from a factoring firm; rather, the factor legally purchases the agency’s invoices at a discounted rate. The allied health staffing firm simply issues its invoice, sells it to the factoring firm and receives cash up front, and then the factor collects on the invoice. No debt is created, so the balance sheet stays clean.
Clearly, allied health staffing agency owners who are tired of waiting to be paid for their services, have less-than-perfect credit and/or don’t want to muddy up their balance sheet by taking out a small business, allied health agency loan should strongly consider factoring their accounts receivables. Selling their invoices to a factor gives business owners quicker access to cash while leveraging their customers credit (instead of their own), and they don’t have to go into additional debt during the process.