Medical Accounts Receivable
Medical Accounts Receivable
The definable assets of a medical practice, a hospital or a surgery center will involve the typical, physical assets made up of equipment, real estate owned by the business, bank account holdings and investments. These are the types of assets that are generally considered when applying for financing or a loan of any kind, and are relatively standard within the financial world. One of the defining characteristics of a typical medical practice, however, is that the accounts receivable will generally make up a large portion of the holdings, and unfortunately these accounts are not usually able to be factored into the assets of a business due to the fact that they are not guaranteed. What this means is that many medical practices hold a large portion of their cash in limbo, on the books as being processed toward collection but not able to be used to purchase necessary elements of business, or borrowed against in the form of financing loans. This presents a unique barrier to growth in the medical field, as the only way to grow operations is to either save enough free cash to pay for the improvements or expansions outright, or borrow the money based upon the existing physical assets that are necessary in order to keep operations moving on a daily basis. You cannot treat patients without the necessary equipment, and that very equipment must be risked as collateral in order to secure a loan.
Medical accounts receivable are a valuable asset, and are only considered as an asset by alternative medical financing firms like Med-Care Solutions. The difference between Med-Care Solutions’ medical accounts receivable financing and a traditional loan is that there is actually no money being loaned at all, and as a result there is no need for collateral or interest payments. Instead, Med-Care Solutions utilizes the purchase of existing or qualified accounts receivable as a method of generating immediate, available cash for the medical provider. This cash is paid to the provider directly from Med-Care Solutions as a third-party, who then assumes the collections risks associated with the accounts receivable in exchange for a modest discount. By removing all of the risks associated with the collections process, the medical facility is able to generate the cash that is available within the accounts in a timeframe that is more acceptable to the typical operational structure of a business. A specific amount of cash is needed every month to pay the expenses associated with operations, and any additional cash over and above those amounts can be utilized for expansion purposes and building the practice to a larger state. These accounts no longer represent money that will potentially be collected in the future, and instead represent payments that will be collected within the same month as when treatments were provided. The added benefit of these types of programs is that they can be utilized in an ongoing basis to actually increase the patient loads of the practice itself through the facility being called upon as a “go to” for attorneys that are involved in personal injury cases or automobile accident litigation. Overall, the medical accounts receivable financing options available to your practice through Med-Care Solutions gives you the flexibility that you never had before, and the ability to gaurantee your income instead of hoping for it.