Medical Financing Made Easy: How To Find the Capital You Need
Cash flow is a key word in most businesses. This is because in spite of other indicators like plenty of clients and new hires, without the cash flow, your business could be struggling. This is especially true in the medical field. It can be frustrating to see business going so well day-to-day, only to be faced with mounting bills that can’t be paid. If you’ve recently started a medical practice or have been hit with decreased cash flow, here are some medical financing options for you to consider.
Starting a medical practice can cost enormous amounts of capital up front. You typically need equipment, the right property and adequate numbers of staff. Even if business is steady as soon as you open, you could run into an issue fast: insurance companies are notoriously slow to pay claims. The earliest you’re likely to see money from those claims? A month. At worst? Several months, and your staff can’t go that long without being paid. Your property will have utilities to pay for every month, and if you don’t have the extra funds to invest yourself, you could be looking at a serious problem.
If you don’t have the cash yourself, medical financing could be the solution. Loans can be a beneficial option for the right practice, though this may be increasing your debt in a way you aren’t comfortable with. Also, this one-time infusion of cash may not be enough to sustain your practice.
Your other option is receivables factoring, in which you sell those unpaid claims, but receive money quickly in return. Though you do lose some value from the claim in fees, factoring gives you the power to establish predictability with your finances in a time when cash flow is uncertain. The system is in place precisely for cash flow problems, and does so without requiring you go into debt. It is a fairly quick process that can be repeated easily, unlike with one-time loans that take time to process. It also shouldn’t be difficult for medical practices to meet the criteria.
Medical practices have a unique set of business requirements that can make daily operations difficult without the proper cash flow. Even after you’ve established your business and have started receiving payment for insurance claims, a period of unexpected growth can throw your finances out of line. Growth should be an exciting time, but you could be struggling to hire new staff or find a larger property without the cash flow you need. Medical financing can be a simple solution to a common problem, so poor cash flow needn’t be a regular issue for your practice.