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Most Credit Impaired Applicants Helped...
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Receivable Factoring F A Q' s
Frequently Asked Questions
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Many members of the health care community, be they doctors, nurses,
home health care providers, etc. may not be familiar with the concept
of receivables financing as a strategic business option as a remedy to
cash flow issues. For these people, we have created the following questions
with answers for purposes of educating health care providers to
options which they may have at their disposal.
1. What is receivable factoring?
2. How does the purchase of my receivables resolve my cash flow problems?
3. What will it cost me?
4. Would you become a partner in my practice?
5. How is having a factor purchase my receivables better than taking out a loan at my bank?
6. Is the purchase of receivables considered a short or long term solution?
7. If I were to sign on as a client, how long until my cash flow problems disappear?
8. Is there a downside to purchasing receivables?
9. Why is factoring the preferred choice when considering the sale of my receivables?
10. What size practices do you typically fund?
11. Are there any hidden fees?
12. What is your turnaround time?
13. What Type of medical practices do you purchase receivables from?
14. How long of a commitment does this represent?
15. How quickly can you provide a preliminary indication regarding our working together?
16. Which claims are eligible for payment?
17. What are the major phases within the process of our working together?
18. Do you take over the billing function within my practice?
BACK TO FAQ's
1. What is receivable financing?
Receivable financing is when a primary funding source purchases your
accounts receivable. You get paid immediately for the amount of the
receivables purchased, no longer having to wait the 60-90 days for
insurance carriers to make payments. A fee, or discount,
is generally included in the transaction.
BACK TO FAQ's
2. How does the purchase of my receivables resolve my cash flow problems?
You receive payment immediately and therefore are able to utilize the
cash in ways that will strengthen your business; e.g. advertising,
purchasing new equipment, bringing in additional personnel, etc.
BACK TO FAQ's
3. What will it cost me?
As one might expect, the costs can vary depending on a variety of
factors including the average size of the receivable, average
turnaround time, size of the practice, etc. The only reliable
approach to learning your specific costs is to provide us specifics
of your practice and have us determine your cost based on those
figures; in other words, it is best to complete
our application for a free quote.
BACK TO FAQ's
4. Would you become a partner in my practice?
No, the relationship the Factor would establish with your practice
typically lasts for one year and is renewable by both parties.
Following the initial purchase of your current receivables,
the Factor will continue to purchase your receivables
generated for each successive week. Our role in the practice
would be directed by you; if you want us to be invisible,
we can be. If you wish us to be more active with
billing/collections, we can. You decide.
BACK TO FAQ's
5. How is having a Factor purchase my receivables better than taking out a loan at my bank?
A significant difference is that a loan at your bank is reflected
on your balance sheet as debt, whereas having your accounts
receivables purchased is a prudent use of your assets, ergo,
the term asset-based lending, in which, no debt is placed
on your balance sheet. In addition, while incurring debt
at your bank requires repayment of the debt with cash,
receivables financing requires no repayment and no cash
drain. Each successive week generates new receivables which
we continue purchasing, thereby providing you with a reliable stream of cash.
BACK TO FAQ's
6. Is the purchase of receivables considered a short or long term solution?
It could be both depending on how it is utilized. It provides
an immediate infusion of cash, which solves the immediate
crisis of poor cash flow and provides for regular
cash flow throughout the course of the year.
BACK TO FAQ's
7. If I were to sign on as a client, how long until my cash flow problems disappear?
Once approved, we can wire transfer the funds into your business account
within hours of our decision. This amount would be the initial funding
and provide you with an immediate infusion of cash. The
subsequent funding would then occur on a weekly basis,
thereby providing you with a regular stream of cash.
BACK TO FAQ's
8. Is there a downside to purchasing receivables?
NO. What occurs is that you gain the quick influx of cash you need to
increase your practice's growth. This enables you to utilize the
funds without waiting for payment from insurance carriers,
placing you in position to better pursue improvements to your
practice: additional personnel, increased advertising, taking
advantage of cash discounts, improving your credit rating, etc.
All of these steps would be impossible without the cash realized
from this process. How many ways can you think of that having
extra cash flow can improve your practice!
BACK TO FAQ's
9. Why is a Factor the preferred choice when considering the sale of my receivables?
We can fund within as little as three weeks of our receipt of your
completed application. There is no debt placed on your balance
sheet, which is a good thing if you may need any different additional funding.
BACK TO FAQ's
10. What size practices do you typically fund?
Typically starting from $30,000 or more of net billings per month.
BACK TO FAQ's
11. Are there any hidden fees?
NO. All fees are stated up-front on your rate sheet. There are
no fees to send in with your application. Quotes are free.
BACK TO FAQ's
12. What is your turnaround time?
As little as three weeks following our receipt of the
completed application. We are committed to getting an
answer back to you as quickly as possible. If an
arrangement is delayed, often it is due to additional
time to get information to us. The sooner we receive
the required information, the sooner we can act upon
it. An on-site due diligence visit is required prior
to the final decision being reached. This is to confirm
the information submitted in the application as well
as to perform other due diligence activities.
BACK TO FAQ's
13. What type of medical practices do you purchase receivables from?
Physician private practices, group practices, clinics,
DME providers and other providers within the medical
arena. We do not purchase receivables for dentistry,
chiropractic, and/or optometry.
BACK TO FAQ's
14. How long of a commitment does this represent?
One to five years typically.
BACK TO FAQ's
15. How quickly can you provide a preliminary indication regarding our working together?
How does 48 hours sound? We are committed to responding within 48 hours
to those who complete an application.
BACK TO FAQ's
16. Which claims are eligible for payment?
Most third party medical claims of qualified insurance carriers
with the exception of Workers’ Comp, dental, optometry, and personal injury.
BACK TO FAQ's
17. What are the major phases within the process of our working together?
The first phase is gathering all the information via the application
packet. Once evaluated, if accepted, we issue a Letter of Intent
which outlines the framework for how we could provide funding to
you. Following our receipt of the signed Letter of Intent, we
schedule the on-site due diligence visit and following that,
if accepted, the initial funding occurs. Subsequent funding
occur on a weekly basis as we continue to
purchase the receivables you generate.
BACK TO FAQ's
18. Do you take over the billing function within my practice?
Your billing and collections functions remain under your control.
We can help you with these functions since our Factors
employees are experienced in medical billing and collections.
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