Invoice funding is a great financing tool for allied health staffing agencies because it bridges the gap between when agency owners invoice a medical facility and when that facility pays. Unfortunately, some allied health staffing business owners are still hesitant to take advantage of all that invoice funding has to offer because of all the misinformation circulating out there. Allow me to debunk some of those myths about allied health staffing invoice funding.
Myth #1: Allied Health Staffing Invoice Funding is an Expensive Financing Option
Truth: First and foremost, an invoice funding fee (i.e. a factoring fee) is not the same thing as an annualized interest rate. For example, an allied health staffing invoice financing company may charge 3% per month, but that’s not the same thing as 36% APR. Rather, an invoice funding firm’s fees stop the day an invoice is paid. Furthermore, allied health staffing agencies can’t and won’t wait 12 months to receive payment for their staffing services. Most agencies agree to payment terms somewhere between 30 and 45 days. So in reality, allied health staffing invoice funding is not costly.
Myth #2: Allied Health Staffing Funding Companies Require a Long-Term Commitment
Truth: Unlike a traditional line of credit through a bank loan, most allied health invoice factoring companies do not require a long-term commitment. In fact, some invoice funding companies only ask for a six month commitment, while others do not require a fixed-term at all.
Myth: If I Work with an Invoice Funding Company, My Customers Will Think I Have Cash Flow Problems
Truth: Not every business has the ability to qualify for financing. So if your agency is approved for a line of credit with an allied health staffing factoring company, is a good indication that your agency is growing and stable. Furthermore, it’s common practice for healthcare vendors to use invoice funding. Once alerted of the change in remittance address, medical providers simply view an allied staffing funding company as your agency’s new accounts receivable department.
Myth: Allied Health Staffing Companies Will Bother My Customers with Frequent Collections Calls
Truth: An invoice funding firm does not want to hinder its ability to collect on invoices, so it approaches the collections process with the same level of professionalism that the allied health staffing agency would. Moreover, the allied health invoice factoring company will initially contact your customers to verify that the invoices presented for sale are valid. Thereafter, the funding company would only reach out to your customers to follow-up on past-due invoices or skipped ones. If there a serious collection issue arises, the allied health staffing funding firm would contact you to discuss the best course of action to take.
Myth: Most Invoice Funding Companies Don’t Understand the Allied Health Staffing Industry
Truth: There are plenty of invoice funding companies that are well-versed in the allied health staffing industry. All you have to do is perform a search for “allied health staffing invoice funding” using your preferred search engine, and then take your pick from the search results.
So in conclusion, don’t be fooled by all of the misconceptions revolving around allied health staffing invoice financing. Because the truth is-Allied health staffing invoice funding is an excellent financing option for agency owners. It’s affordable, doesn’t require a long-term commitment, increases your agency’s credit rating, and most of all, it helps your business maintain a positive cash flow.