Two common misconceptions about alternative financing in the medical field are that it is difficult to obtain, and also that financing is loan-based. While this may be true for traditional loans, medical financing is a different story.
Why are alternative financing options needed?
Healthcare providers sometimes find themselves not able to pay outstanding bills, but still having enough theoretical income to cover them.
The reason for the lack of cash to pay the bills is due to the slow-moving process of collections. Measures must be taken to keep the facility open during the process of collecting money owed. Even though you have provided more than enough services to earn the necessary money, those payments take more time to collect than you have. You find yourself struggling to pay your own expenses, and alternative financing solutions become an imperative.
Alternative loans become an option to secure cash
Loans in the traditional form are generally secured against facility assets, from the machinery to the accounts receivable (A/R).
However, in most cases, it is difficult to actually get a lender to provide a loan using A/R as collateral because they are not guaranteed. An additional drawback to traditional loans against your assets is that you have to pay the principal back plus interest even if you were not able to collect on the A/R. This situation may bide you some time, but if you are not able to collect on those accounts, you will be in a worse situation than before.
You could end up not having the money that is owed to you, and owing interest on the loan.
Medical account receivable financing gets you cash and no extra debt
Alternative financing available through PROVE includes medical account receivable financing. What this means is that we will purchase your existing A/R for a lump sum, which is paid directly to you within a short time frame.
You can utilize that money in any capacity—there are no restrictions like this in traditional loans. Through our agreement, we become the account owner and assume 100% of the risk associated with bad debt. If the debt is never collected or if it takes a long time to be paid, you need not be concerned. You will never have to pay that money back to us. It is yours, and you will be able to keep it free and clear. Many facilities explore A/R financing programs as an ongoing revenue stream.
With an ongoing arrangement with PROVE, we continually purchase the accounts as they are created. This assures that payment for services is received in a timely manner. The added costs of collections become a thing of the past.
You can now concentrate on providing care and not worrying about collecting the amounts owed to you. This streamlining not only saves money in accounting costs but reduces the pressures felt by so many medical providers today. Never worry about being paid again, PROVE is here for you.
Ready to get started? Contact us here.
