Medical Account Receivables (The Hidden Asset)
As the natural life-cycle of a business plays out, they will invariably find themselves in need of more cash than is on hand at the moment. The reasons for the cash necessity being larger than the amount that is currently on hand can be numerous, ranging from need to purchase the elements of expansion like more equipment, larger spaces, and hiring more staff to the need to pay off existing bills from a pool of money that has fallen short due to the collections process. No matter what the reason, there are numerous times in the medical business like all other businesses that will result in a need for cash that is not currently in the bank account. In these circumstances, medical professionals must turn to financing options in order to gain access to the necessary funds.
Financing options for the medical profession take the form of traditional loans and alternative financing sources. The traditional form of medical financing works like any loan, securing an inventory of collateral that can be seized and liquidated to cover the loan money if a default on payments happens. Physical assets in the form of equipment and bank accounts is put up against the loan, which is then paid back with interest over a period of time. If at any time during that process the payments are not able to be met, then the physical equipment is repossessed and sold in order to recover the loan balance. The drawbacks to this type of risky financing is the absolute lack of guarantee that anything will change in the future in order to bring in the additional money necessary to repay the loan plus the added interest. If an expansion is taking place, there is no guarantee that it will attract the added patients necessary in order to cover the added expenses. If it is to cover expenses during a month where collections or revenues fell short, there is no guarantee that there will not be months in the future where the same thing happens, triggering a default and seizure of your business assets. Unfortunately a medical facility cannot stay operational without the physical assets necessary to practice medicine, leaving the risk to be considered when applying for the loan…”am I willing to risk my entire practice by borrowing this money?” Many medical professionals are not gamblers, and will answer that question with a no.
The alternative financing that is available to medical providers involves a hidden asset that is not considered in the traditional lending process. “Medical accounts receivable financing” is the process of purchasing the existing accounts receivable at a slight discount by a third party. This third party assumes all of the collections risks in exchange for the discount that they receive when the account is purchased. If the account cannot be collected upon, the medical facility is not held liable in any way to repay the money. Through this type of program, medical facilities can utilize the money that is owed to them as an asset which can generate immediate cash for use at their discretion, without the hassles and risks associated with traditional loans. There is no collateral necessary, nor is there any additional money owed as interest, or long term payment plans that have to be accounted for. Your clinic or medical facility is simply paid outright for the services that have already been performed, and which you are attempting to collect. Contact Med Care Solutions today for information on these exciting opportunities, and to become involved in our medical account receivables programs.