Use Home Health Care Factoring to Improve Your Cash Flow
A Healthy Cash Flow Solution
If you run a home care company, you know that cash flow can be unpredictable. When payments from Medicare, Medicaid or third-party insurers trickle in slowly, covering payroll and other costs can prove challenging.
Financing Home Care Receivables
Accounts receivable factoring helps home health care agencies get paid sooner. You know that the home care business can be lucrative, but cash flow shortages are common in the healthcare industry. Slow-paying customers create unpredictable cash flow, which makes it tough to cover your payroll needs and/or hire new employees to keep up with growth. If your agency provides skilled or unskilled home care services, accounts receivable factoring offers the stable source of working capital you require to keep up with growth.
Financing home health care receivables eliminates the wait to be paid. Factoring provides home care companies funds within 24 hours instead of waiting months to receive payment from the following:
- Third-party insurance companies
Factoring for Home Health Care Providers
Factoring isn’t a loan. The home health care factoring process involves the sale for your outstanding accounts receivable. A factor purchases your home care receivables and advances the cash right away. This means that your company will have more funds available for expenses:
- Overhead Costs
- Caregiver Payroll
- Operating Expenses
In addition to the up-front benefits of home health care factoring, your agency can spend even less on administrative tasks such as billing and collections. This frees up more time for you to focus on your home care agency.
Your primary focus should always be patient care, not worrying about how you’ll pay your staff next week. Home healthcare factoring ensures your home care agency has consistent funding to cover all your expenses and manage expansion in this growing industry.
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Funding for Home Healthcare Businesses
Third party payers and government agencies like Medicare and Medicaid typically pay slowly, which can tie up cash flow that’s vital to home healthcare providers. Home health care accounts receivable factoring improves cash flow instantly. Factoring home healthcare receivables is ideal for your agency if you provide at-home services to those who need temporary or long-term assistance with the tasks of daily living, such as:
• Older adults
• People with disabilities
• People who are recovering from illnesses or procedures
• People with chronic illnesses
Traditional financing isn’t always an option, especially for home care companies that have been in business for less than one year. Qualifying for accounts receivable financing is easier than other lending options. If you have outstanding receivables, you can start factoring. Best of all – there’s nothing to repay, so you won’t have to worry about adding debt to your balance sheet.Contact Us
Is Accounts Receivable Factoring Right for Your Home Care Agency?
Your home health care agency may seek factoring for cash flow support because:
- You have been turned down for a bank loan
- Your agency is small, new, or has poor or no credit
- Your agency is well-established and would like to improve working capital
- You want to hire more caregivers to keep up with increasing demand
- You cannot afford to wait 30, 60, 90, or 120 days to receive funding
- You need funding soon to meet payroll, taxes, and agency operating expenses
- Your home healthcare receivables can be collateralized
If you’re just getting started in the home care business, you’ll want to download our latest eBook with awesome advice for starting a home health care company!