Medical Financing Options for Smaller Practices

Smaller medical practices often need to resort to medical financing procedures to fill in gaps in cash flow. The nature of the medical payment system requires that medical providers wait for payment.  As a result, they have to resort to alternative payment methods. Here are a few popular options that smaller practices can use for medical financing. 

Factoring

Medical factoring is a popular procedure that involves a finance company and your accounts receivable. When a patient comes into your clinic and has a procedure done, their insurance company is going to pay a certain amount. As long as you can prove this, you have a verifiable asset. The finance company will take your qualified accounts receivables and pay you for them at a discount. They will then collect from the insurance company and make back their money with interest. 

Lines of Credit

Other finance companies will offer you a line of credit on the same information. For larger accounts receivable balances, you might have difficulty finding a finance company that will take on the whole amount. Instead, they may offer you a line of credit based on these receivables instead. This can improve cash flow and bring you the help that your practice needs. 

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