Doctors operating out of their own practices or clinics must also stay on top of the business side of their work. They also have to manage expenses, meet payroll, manage employees, and conduct various other activities that come with running their own business set-up. While one wouldn't equate doctors as struggling for cash, they do face their fair share of tight cash flow situations and can certainly use the services of alternative lending institutions to make operations flow a bit more smoothly.
How can alternative lending institutions help doctors?
Working capital: As most patients come in through heath insurance companies, getting insurance companies to make payments on time, and minimizing the risk of invoice rejection is a continuous task for all healthcare professionals. Delayed payments by insurance companies are one of the biggest reasons for cash flow hiccups faced by medical practitioners.
While cash runs low, the expenses of meeting payroll, utilities, insurance, and similar expenses remain urgent and constant. Here an alt-lender can help.
An alternative lender such as the New York-based Mantis Funding offers medical professionals a variety of financing options. The two most popular ones are Merchant Cash Advance (MCA) and Business Line of Credit (LoC). Mantis Funding reviews applications for both these options based on the transactional data or the business and the credit history of the business owner.
An MCA is a lump sum cash payment, which is repaid by deducting a percentage of daily or weekly sales revenue. This is a simple solution for short-term, one-off cash flow shortages. A line of credit, on the other hand, offers long term relief; it provides a revolving flow of credit wherein practitioners are given a credit line with maximum value and can withdraw the amount they need at will.
Growth capital: Medical technology is changing and evolving continuously, and in the last decade, the pace of innovation has quickened. In order to offer their patients the best treatment options, healthcare professionals must keep upgrading their equipment. However, medical equipment is very costly and almost impossible to afford without financing.
Alternative online lenders have special equipment financing offers for medical professionals, which help them get the latest technology but without stressing their cash reserves. Most alt-lenders like Mantis Funding offer two equipment financing options – leasing and purchasing.
Equipment leasing is best for equipment that evolves and becomes obsolete very quickly. As leasing is almost like rental, there is no down payment or collateral required for it.
Equipment purchase financing is recommended for business-critical equipment that has a long shelf life. Here the piece of equipment itself serves as collateral and drives down repayment costs. But in most cases, the buyer is expected to put provide a down payment.
In both these funding options, Mantis Funding reviews the client applications based on their business needs, cost of the equipment, financial records, and other business transactional data.
Final Thoughts: To keep things ticking along smoothly, medical practitioners need to keep their business cash flow in the green. The long-term solution is naturally to make your collection process watertight, reduce errors and delays as much as possible. However, even with perfectly coded claims from their side, insurance companies usually take months to pay.
It is best to factor these delays and plan around them by getting in touch with alt-lenders well in advance. With help from lenders like Mantis Funding, healthcare businesses can easily manage day-to-day expenses AND invest in their growth without being hindered by the lack of ready cash.
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