| If you are running a medically related business such | | | | percent of the invoice value, depending on the rating |
| as medical supplies to doctors or hospitals or running | | | | of your customer or insurance company as decided |
| a clinic, then you must be aware that although sales | | | | by your factoring company, the number of days of |
| have improved, margins are under pressure and the | | | | credit given, and the monthly invoice totals i.e. the |
| waiting period to collect pending payments are | | | | volume of sales and claims. Your factoring company |
| increasing day by day. Also with the advent of | | | | might also take care of collecting the payment from |
| Medicare and other insurance companies making the | | | | your customers and they can send you regular |
| payments after completing their assessment, the | | | | statements of the payments collected from your |
| wait for payments has increased to around 120 days | | | | customers and the pending receivables statement. |
| and that could hamper your cash flow and hence | | | | This can free up your collection department and you |
| your growth. You could approach a bank for your | | | | can utilize your time and their services in a different |
| needs but that would require endless paperwork, | | | | way. The more your value of receivables, the lower |
| collateral and lots of time. You would also have to | | | | the rate of commission! |
| pay a fixed percentage of interest on that loan | | | | Getting most of your invoice amount immediately |
| amount. Here is where medical factoring could be a | | | | also improves your cash flow and that money can be |
| lifesaver to your business. Here is how it works. | | | | utilized in paying off salaries, suppliers and even in |
| Normally when you sell your items to doctors or | | | | making bulk or cash purchases, which could give you |
| hospitals, you make a sales invoice or you put up a | | | | a better profit margin. You can also execute large |
| claim to insurance companies or Medicare or Medicaid | | | | orders from hospitals without having to worry about |
| to claim for services provided. You can "Sell" your | | | | your money getting locked during the credit period. If |
| sales invoices issued to various reputed doctors, | | | | you have a testing or diagnostic center, then you can |
| clinics or hospitals and even your claims to insurance | | | | invest in new medical equipment. You could even hire |
| companies to your factoring company. The factoring | | | | more staff to increase your business. |
| company then electronically transfers the invoice | | | | Find a matching medical factoring company through a |
| amount in 2 installments in the following way. The | | | | reputed factoring broker or even through the |
| first installment is usually 60 to 85 percent of the | | | | Internet. The medical factoring company should be |
| invoice amount and this amount is transferred to | | | | able to provide you prompt service and should also |
| your account in 24 to 48 hours. The second amount, | | | | be efficient and courteous while collecting payments |
| also known as the "reserve" amount, is transferred | | | | from your customers or insurance companies. Since |
| minus the factoring company's fee when the full | | | | many of them also take care of bad debts, you will |
| invoice amount is received from your customer or | | | | also have to worry less about collection of payments |
| insurance company. | | | | and bad debts. This will help in taking your medical |
| The factoring fee is usually between 1.5 to 15 | | | | business to a new high. |