Funding Solutions for Healthcare Companies
In our experience, we have found that most healthcare finance requirements can be met by three funding solutions: working capital loans, invoice factoring, and asset-based lending.
Working capital loans
Working capital loans are a convenient source of finance for everything from covering day-to-day expenses to making refurbishments and maintaining your cash flow when you have an unexpected expense or a low-income month.
This type of healthcare business funding is not suitable for long-term investments. Instead, it is a fast and flexible way to achieve your short-term financial goals.
Invoice factoring allows healthcare companies to effectively sell their outstanding invoices to a finance provider to turn them into cash. One of the greatest challenges for companies in the healthcare industry is the length of time it takes for insurance claims to be paid. Rather than waiting up to 120 days for payments to be made, healthcare providers can receive up to 90% of the value of their invoices within as little as 24 hours.
Unlike a secured loan, healthcare factoring removes the burden of debt from the healthcare company, as the finance provider recovers the value of the invoice from the end customer. It’s also a scalable form of funding, as the value of the advance payment healthcare businesses will receive increases in line with their invoices.
Asset-based lending is an effective way to invest in your healthcare business, whether it’s by fitting out new premises or buying high-value medical equipment. Asset-based lending involves taking out a loan or line of credit that’s secured against the assets you own. That could be physical assets such as medical equipment and vehicles or liquid assets such as your accounts receivable.
You can use asset-based lending to meet working capital requirements, fund your growth, or refinance your existing debt. This type of funding facility is typically very flexible and has a lower barrier to entry than commercial loans. That makes it a viable option for smaller healthcare businesses and firms with less than perfect credit records.