Instead of waiting 30, 60 or 90 days for payment from hospitals and other health care institutions, suppliers can now receive cash within 24 hours through the sale of their accounts receivable to PRN Funding, a new self-funded and owner-managed organization serving suppliers to the health care industry. The sale of receivables, known as “factoring,” provides an effective source of cash for growth or other activities when current working capital is inadequate.
How Factoring With PRN Funding Works
PRN Funding will purchase the financial rights to valid invoices that have been accepted and verified by any creditworthy health care institution, including government agencies, so long as these receivables have not been pledged to another entity. PRN will wire as much as 80% of the outstanding balance within as little as 24 hours. Upon full payment by the healthcare institution, PRN will forward the balance minus a service fee to the supplier.
While the supplier bills on the supplier’s own billhead, checks are directed to PRN. PRN provides courteous, professional, efficient collection services; with sensitivity to the unique relationship between health care providers and their suppliers. PRN handles all bookkeeping services, including the posting of invoices, entry of payments, the deposit of checks, and regular receivables reports. As a “non-recourse factor,” PRN assumes risk of non-payment due to insolvency. PRN also provides accurate and speedy credit information on current and potential clients. All expenses are absorbed by PRN.
The company may choose to sell one or many invoices, for small or large amounts; with no complicated application or long-term contract required. Acceptability is based on the creditworthiness of the health care institution, not the financial condition of the supplier. PRN’s factoring service is immediately available upon receipt of the supplier’s application and completion of a due diligence background check.
Benefits
Factoring offers a source of financing that grows along with sales, does not require the commitment of other assets, and does not show up as a balance sheet liability. It allows suppliers to leverage the creditworthiness of their customers, and frees time, overhead and capital tied up in accounts receivable. Factoring also allows the supplier to offer credit terms without impacting cash flow, and may enable the supplier to take advantage of cash discounts that can partly defray the factoring fee.
Founder
Philip Cohen founded PRN after extensive experience in the medical transcription industry. He was VP of Corporate Development for Medical Records Corp.; Sr. VP/General Manager of its successor, The MRC Group; and guided the launch and successful operation of PowerScribe, a leading speech recognition/medical transcription product. Since the sale of The MRC Group to MedQuist, Mr. Cohen has been an industry consultant.
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