The tangible assets of a medical practice, hospital or surgery center will involve physical assets made up of equipment, real estate, bank account holdings, and investments. These types of assets are generally considered when applying for loan financing of any kind. They are relatively standard within the financial world. In medical practice, however, accounts receivable (A/R) will generally make up a large portion of these assets. Unfortunately, these accounts are not usually able to be factored into business assets because they are not guaranteed.
Many medical practices end up holding a large portion of their cash on the books, being processed toward collection, unable to be used to purchase necessary elements of business, or borrowed against in the form of financing loans. This holdup presents a drawback for medical professionals wanting to grow. The only way to expand operations is to either save enough to pay outright for improvements or expansions, or to borrow money based upon the crucial physical assets needed to keep operations moving daily. Undeniably, you cannot treat patients without the necessary equipment, but that very equipment must be risked as collateral to secure a loan.
A cash exchange for your outstanding invoices
There are other valuable assets not often considered —medical accounts receivable. A/R are a valuable asset that is only considered as an asset by alternative medical financing firms like PROVE. The difference between medical accounts receivable financing and a traditional loan is that there is no money loaned. If there’s no loan, then there is no need for collateral or interest payments. Instead, we purchase existing or qualified A/R as a method of generating immediate, available cash for the medical provider. Cash is paid to the provider directly from PROVE, who then assumes the collections risks in exchange for a modest discount.
Remove the risk to gain more business
A/R no longer represent accounts that potentially default or money to be collected in the future. Instead, they represent secure payments within the same month as when services are rendered. By removing all of the risks associated with the collections process, the facility can generate cash immediately. Any cash over and above overhead costs can be utilized for expansion purposes and building a bigger and better practice. The added benefit of these types of programs is that they can be on an ongoing basis to increase patient loads. The facility becomes a “go-to” provider for attorneys that are involved in personal injury cases or accident litigation.
Medical accounts receivable financing available to your practice through PROVE gives you the flexibility that you never had before, and the ability to guarantee your income instead of hoping for it.