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Medical Receivable Claims Factoring:  Frequently Asked Questions

Q.  If I have been turned down for bank loans can I still qualify for Medical Receivable Claims Funding ? 

Yes, your credit rating is less important than is the credit of your payors – insurance companies and the State or Federal Government.

Q.  Isn’t Medical Receivable Cliams Funding similar to a bank loan ? 

No.  Unlike a bank loan, Medical Receivable Claims Funding provides debt-free immediate access to unlimited working capital.

Q.  If Medical Receivable Claims 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, but has only recently become available to Health Care Providers.

Q.  Are collateral and personal guarantees needed to secure Medical Receivable Claims Funding ?

No.  The funding source only requires a security interest in the provider’s medical receivable claims.

Q.  Isn’t it risky to turn my medical receivable claims 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 the overall percentage of claims collected, decreasing the reimbursement interval, and reducing administrative overhead costs.

Q.  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 their working capital requirements.

Q.  Besides smoothing out my cash flow, what other benefits are there to Medical Receivable Claims Funding ? 

Access to unlimited working capital improves the credit rating of the provider.  Practice creditors may offer cash discounts for early payment, sometimes up to 25 %.  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.  Dependence on bank lines of credit are reduced, or often eliminated, along with having to make personal guarantees to obtain them.

Q.  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 to be extremely unlikely to occur.

Q.  Do I need to generate a certain level of monthly receivable claims to qualify for Medical Receivable Claims  funding ?

Different funding sources have their own criteria for whom they will and will not fund, based partly on the net monthly medical receivable claims levels to be submitted.  Your Certified Cash Flow Consultant is the expert at introducing the client to the correct funding source in order to meet his client's individual funding needs.

If you would like to discuss other questions you may have regarding Medical Claims Factoring, or other services, that Victor Resource Capital can help you with, please call  949 - 735 - 8248 to get the answers you need.