There is a lot of misinformation out there that paints medical staffing factoring in a bad light. So much so that it’s difficult for agency owners to weed out the accurate medical staffing factoring information from the inaccurate. This article is designed to do just that—bust medical staffing factoring myths so agency owners can uncover the truth about medical staffing invoice financing.
Myth: Medical staffing factoring is an expensive financing option.
Truth: It’s important to consider the fact that a factoring fee is not the same thing as an annualized interest rate. For example, if a medical staffing factoring firm charges 3% per month, it cannot simply be translated into 36% APR. Rather, a factoring firm’s fees stop the day an invoice is paid. Medical staffing agency owners do not typically wait 12 months to receive payment on an invoice, so the fee is not nearly what agency owners perceive it to be.
Myth: Medical staffing invoice funding requires a long-term commitment.
Truth: Contrary to traditional small business loan arrangements, many medical staffing factoring companies do not require a long-term financing commitment. Moreover, in most cases, agency owners have the freedom to choose when, who, how much and how long to factor their medical staffing invoices.
Myth: Medical staffing agency owners will lose control over their accounts.
Truth: Factoring makes it easier for medical staffing entrepreneurs to manage their invoices. Traditionally, invoice funding firms work closely with medical staffing agency owners when it comes to monitoring accounts. In addition, most factoring firms generate ongoing reports and routinely share trends with their clients. This makes it much easier for medical staffing agency owners to have the ability to review purchased accounts and collections and follow-up when necessary.
Myth: The hospitals where I staff will think my medical staffing agency has cash flow problems.
Truth: Remember, lots of medical staffing agencies use factoring and many medical facilities are already familiar with healthcare factoring. Once alerted of the change in remittance address, healthcare facilities simply view a factor as your agency’s new accounts receivable department.
Myth: My customers will be bothered by frequent collection calls.
Truth: Following-up on past-due invoices can be cumbersome and time-consuming for an agency owner who is trying to grow his/her business. Therefore, many medical staffing factoring firms provide professional collections services as a part of the invoice funding process. Rest assured that factoring firms only contact healthcare facilities to verify that the medical staffing invoices are valid. If there is a discrepancy, and the invoice cannot be successfully collected, the factoring firm will contact the business owner to discuss the issue.
It’s unfortunate that there is so much incorrect information floating around about medical staffing factors. Hopefully, this article has helped debunk some of the more common medical staffing factoring myths with the real facts, so that medical staffing agency owners can make more educated financing decisions in the future.