With the year 2014 now in full swing, what’s your financial health like? Is it on the upswing too, or are you worried about cash flow problems? If it’s the latter, don’t worry, because there are plenty of 2014 medical factoring options that can help you out of a tight financial situation.
Is Medical Factoring a Loan?
When you avail of medical factoring, you are not taking out a loan, but rather, a cash advance. Medical factoring can be great for companies in the health care field, whether they are key players, such as clinics and hospitals, or businesses that are responsible for providing support services to those in the medical and health care field, such as:
- Manufacturers and/or suppliers of medical equipment
- Agencies that facilitate nurse staffing
- Providers of medical transcription
- Drug and/or alcohol rehabilitation centers
- Any business or company that is allied to, or dependent on the medical and health care industries for its operations
Benefits of Medical Factoring
The most direct answer to the question of what you can get out of medical factoring is this: you get your cash flow freed up, so that you can focus on attending to your core business, instead of worrying about where to get funds for such things as equipment repair or upgrade, hiring of additional staff, paying the rent, paying the salaries of your existing staff, paying utilities, buying materials, and many other concerns.
In a nutshell, you’ll be getting a high level of freedom and convenience. You will also be able to offer your customers longer payment terms.
These happen because once you sell to the factoring company your unpaid or uncollected invoice, they will give you cash, which is equal to the discounted face value of the unpaid invoices. The Factor or factoring company will then collect from those who owe you money on the due date that you and your customer agreed upon.
Aside from what has already been explained, the other matters which can affect your 2014 medical factoring options include:
- Financing costs. The Factor’s financing costs are affected by the reliability of your customers in paying what they owe. If your invoices are made out mostly to individual customers, the financing costs will be likely higher, as there will be more risk on the part of the factoring company. Conversely, if your invoices are made out to third party companies, such as insurance agencies, which will require a B2B or business-to-business transaction between the factoring company and the insurance agencies, then financing costs will be lower.
- Identity of Collector. There are companies that avail of medical factoring who are uneasy with having the name of the factoring company appear as the collector of the invoices, instead of their business name. If you are concerned about this matter, you may bring it up with the factoring company of your choice. Most factoring companies will be able to come up with a solution to such concern.
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