Commercial lines of credit and business loans get harder and harder to qualify for. That's why, many medium and small medical practices and healthcare businesses are turning to medical factoring to help lessen their slow cash flow.

Even though, many medical practices can still qualify for a business loan or line of credit. And many think that it is not always possible to solve their cash flow problems in the long term with traditional business financing products. It can be explained easily. Traditional business loans have to be paid within a few years and lines of credit have fixed maximum limits.

Medical factoring is an interesting financing option. With this you are provided with financing that is tied to your insurance claims. Thus if you file more claims this month than last month, your financing goes up. Besides, it provides you with expected cash flow. It assures you that you are able to meet your office costs. You'll have expected money to pay rent, meet payroll and invest in growth.

Nevertheless, medical receivables factoring is perfect for small medical offices. In spite of this, most factoring companies have minimums, and many will finance an office that is billing as little as $50,000 (net) per month.

How it works:

1. Your insurance and Medicare/Medicaid claims are submitted as usual. You also have to send a copy to the factoring company.
2. The factoring company advances you 70% to 85% of your net collectibles.
3. The transaction is settled when the medical factoring company gets paid.

Setting up a factoring account can take a couple of weeks. This is because the medical factoring company will need to fulfill their due diligence and audits. Nevertheless, once the account is set up, the financing is continuous. You have 24 hours to get your claims funded.

Your small medical practice can slow cash flow but good growth prospects. In this case factoring may be the tool that will help you finance your growth.