Most Frequently Asked Questions

 

1. If I have been turned down for bank loans can I still qualify for Receivables Funding?  Yes, Your credit rating is less important than is the credit of your payors – insurance companies and the State or Federal Government.
2. Isn't Receivables Funding similar to a bank loan?  No.  Unlike a bank loan, Receivables Funding provides debt-free immediate access to unlimited working capital.
3. If  Receivables Funding is so effective in producing solid, dependable cash flow, why haven't I heard of it before?  Factoring (advance funding of receivables) is one of the world's oldest methods of increasing working capital for business.
4. Are collateral and personal guarantees needed to secure Receivables Funding?  No.  The funding source only requires a security interest in the provider's receivables.
5. Isn't it risky to turn my receivables over to a funding source to collect them?  No.  Many providers who may have initially felt this way, now find the funding source successful in improving their bottom lines by increasing overall percentage of claims collected, decreasing the reimbursement interval and reducing administrative costs.
6. Am I required to draw cash advances every week?  No.  The client can factor as little or as often as he or she needs to, depending on working capital requirements.
7. Besides smoothing out my cash flow, what other benefits are there to Receivables Funding?  Access to unlimited working capital improves the credit rating of the provider.  The provider's balance sheet improves making the practice more attractive for buy-out or acquisition.  Capital is available to reliably meet payroll and malpractice premiums.  Funds can be easily drawn to cover practice expansion, adding partners or purchasing/leasing new equipment.
8. What if my cash flow doesn't improve with the factoring arrangement with the funding source?  The provider can terminate the arrangement at the end of the trial period, usually 1 year, without penalty.  Unless the productivity of the provider in generating receivables falls precipitously, we have found that this is extremely unlikely to occur.
9. Do I need to generate a certain level of monthly receivables to qualify for Receivables funding?  Different funding sources have their own criteria for whom they will and will not fund, based partly on net monthly receivable levels.  A Certified Cash Flow Consultant is expert at introducing the client to the correct funding source in order to meet his individual needs.