Gone are the days when a home health care’s agency’s only financing option is a line of credit from a bank. In fact, there are dozens of ways a home health care agency can fund its growing operations. However, one specific option business owners should consider is home health care invoice funding.
In a nutshell, home health care invoice financing is the process whereby an agency sells its accounts receivables to a third party (factoring firm) at a discount. Rather than waiting weeks or months to receive payment from Medicaid, Medicare or other governmental agencies, factoring firms advance cash immediately upon purchasing home health care invoices, which gives business owners the ability to maintain a positive cash flow.
All it takes is three simple steps to set up a home healthcare invoice funding account…
1. Contact a Home Health Care Invoice Funding Company
There are thousands of factoring firms to choose from. The trick is to find one that understands the intricacies of the home health care industry. Luckily, a simple Google search for “home health care invoice funding,” can quickly narrow down the playing field. Once you select an invoice funding firm to work with, you can usually complete an online application or call and speak with a home health care funding account representative to have him / her email and / or mail out a complete document package.
2. Speedy Home Health Care Funding Application Review
Upon receiving a completed factoring application, the home health care funder will begin its due diligence process immediately. For starters, the home health care factoring company will thoroughly review your agency’s history. Keep in mind though that a home health care funding company does not require a long or spotless credit history in order for an agency to become a client. Next, the factoring company will determine if any liens related to your business exist, such as UCC, tax, or judgment. Finally, the funding company will conduct an extensive credit review of the agency’s current customers.
3. Quick Credit Decisions
Unlike having to wait weeks or months to be granted a loan, the turnaround time to be approved for home health care invoice funding is typically only 3-5 business days, and many times, it’s even shorter than that. Once the required documentation has been returned to the home health care invoice funding company, it’s reviewed immediately. If everything is in order, the invoice financing company sets a credit limit for the agency’s debtors, and the first funding is initiated.
Even though there are numerous ways that a business owner can obtain financing, home healthcare invoice funding is one of the best options available because home healthcare business owners can get approved quickly and have instant access to cash all through the sale of their accounts receivables.