WHAT'S IN THIS GUIDE
Home health care includes skilled medical and support services in the home, usually under a doctor’s care. But like with most other medical services, it can take months to be paid. Filling out paperwork and dealing with insurance claims, then waiting weeks or months to be paid can lock up cash flow and stop growth.
Invoice factoring for small business and home healthcare agencies can unlock money you’ve already earned and give you access to much-needed funds fast.
Shortages in cash flow are common in the healthcare industry. Home healthcare is no different. Payments from Medicare, Medicaid, and third-party insurers trickle in slowly. If your agency provides home care services, factoring your receivables can offer a consistent source of working capital to make payroll and pay your ongoing business expenses.
Factoring for home healthcare companies provides the funds you need when you need it—often within 24 hours. No more waiting months to be paid. It’s an excellent option for any agency that provides temporary or long-term at-home assistance with everyday tasks for people with disabilities, older adults, people recovering from procedures or illnesses, and people with chronic illnesses.
Home healthcare factoring is an option to traditional financing. Especially if you’ve been in business for less than one year. It can take months to qualify and receive funds from loans and lines of credit.
You sell one or more outstanding invoices to a factor, like FundThrough, and get an advance right away with factoring. No monthly payments or high-interest rates, and factoring won’t add debt to your balance sheet.
In addition to increased cash flow, your home healthcare agency can spend less time chasing down payments from government agencies, insurers, and your customers, which frees up time to focus on your business and patient care. Home healthcare factoring ensures your agency has stable funding to not only cover your expenses but manage growth in this expanding medical industry.
In the past, factoring was largely misunderstood. Business bank loans and lines of credit were the traditional and accepted forms of financing, along with credit cards. Each of these different funding options have pros and cons to consider.
Costs for a new or growing business can be significant. You may need to purchase equipment and inventory, pay employees, and keep up with rent, taxes, and marketing. You may consider taking out a business loan.
A line of credit (LOC) is a lot like a credit card. You can borrow/withdraw money up to a certain maximum amount determined by your financial institution. You can cover day-to-day expenses and pay back your debt, only to borrow again when needed.
Like all forms of funding, business credit cards must be used wisely or things can go sideways very quickly.
Invoice factoring is not a loan. The application process is quick, there is no repayment obligation, no high interest rates, and no debt to record on your company’s balance sheet. Plus, many more companies will qualify.
Choosing a factoring partner is a lot like choosing any lender. It pays to do your homework. There are also several questions to ask prior to starting the application process:
Most factoring companies work with most industries, but not all. Some factors specialize in only a few industries.
FundThrough works with home healthcare companies.
Advance rates can range from 60% to 100%, depending on the factoring company and sometimes the industry.
FundThrough advances 100% off the invoice amount, less a fee.
A factoring company should be able to provide what factoring fees it charges upfront. But some companies may make it difficult to determine the total costs of using their service. FundThrough offers transparent pricing so you know prior to signing an agreement.
FundThrough pricing – 100% advance rates minus a flat fee. One upfront price.
A minimum is the amount you must factor every period (month, each quarter or every year). Some factoring companies offer plans that require minimums, while others do not.
FundThrough doesn’t require minimums. Only fund when you need to.
Cash flow is the number one problem for most start-ups and small businesses, especially if they’re growing. This is also true for home healthcare. Invoice factoring companies typically consider several situations before offering you an advance.
Factoring invoices is a sound financial strategy if you—
FundThrough takes the legwork out of accounts receivables financing. It’s fully automated platform is easy to navigate, it’s fee structure is transparent and a customer service rep is there when you have questions. Find out what FundThrough’s clients have to say, and start factoring your invoices today.
FundThrough places No, 166 on The Globe and Mail's fifth-annual ranking of Canada's Top Growing Companies.
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