Time can be of the essence when it comes to keeping your medical business profitable. When insurance companies and private clients delay paying you on time, you must figure out how to stay financially afloat without overextending yourself with credit or going into debt by taking out bank loans. Rather than scrimp and barely get by on a small amount of cash until you get paid what is owed to you, you can use factoring to keep your business alive and profitable. When you rely on factoring, your business can reap these important benefits.
Availability of Cash
Having enough cash on hand to grow and build your business is vital. When you choose factoring for your business's financial needs, you can increase the amount of money that is available for you to use to market your company, build your customer base and pay your bills on time. In fact, factoring gives you immediate payment for your outstanding invoices, freeing you from having to wait for insurance companies or clients to pay you. It also lets you reduce your administrative costs, saving your business money that you can use for other expenses.
Carrying an excess amount of debt can cripple your medical business. Factoring helps you reduce the amount of debt your business owes, as well as reduces the outstanding debt that is owed to you. When you choose factoring for your business, you avoid the long wait to be paid by insurance companies. You also get access to professional debt collection services and avoid having to spend time contacting your debtors and demanding payment from them.
Building Credit for Your Business
Factoring provides you with the opportunity to establish or build better credit for your business. When you get paid quickly and have cash on hand to put back into your company, you can pay your outstanding balances to your creditors on time and solidify your credit worthiness with them. This benefit can be vital if or when you need to buy products or services from them on credit in the future. Likewise, factoring does not risk your business's credit or lower your credit score. In fact, it is not your credit, but that of your clients that gets checked during the approval process. If your clients have solid records of paying their bills on time, your business will be approved for the factoring loan. You do not have to fear being turned down or given a smaller amount of money as you might when you apply for a loan with a bank.
No Long Term Commitment
When you get a loan from a bank, you often face months, if not years of repaying the balance. However, factoring avoids that long term commitment that you may find to be stifling and ill-fitted for your medical business' needs. After you are paid, you can effectively end the relationship with your factor lender. You are under no obligation to continue the partnership, unless you have more invoices you would like to sell. Even more, a bank loan typically requires that you wait for days or even a week or more to find out if you are approved. Factoring proves to be simpler and more flexible for your financial needs. In fact, you may be able to fill out an application online and know within a short amount of time if you are approved or not. Having the money you need to pay your bills and grow your business is crucial to your future success. Rather than wait a month or longer for insurance companies to repay you, you can get money faster when you rely on factoring. Factoring can provide your medical benefit with important benefits that will help you expand your client base and grow your company to new levels.