Patient Financing: Improving Your Cash Flow
For healthcare centers and private practices, one of the main causes of cash flow problems can be traced to a lag in customer payments on open invoices. Unfortunately, when cash flow strain gets to be severe, many medical practices resort to taking on additional debt through bank loans to cover immediate financial obligations until customer payments come through. As an alternative solution, some practices are turning to patient financing to improve cash flow and avoid placing debt on the balance sheets.
An Overview Of Patient Financing
Patient financing is a service which is arranged through a commercial finance company. Once in place, a medical practice can accept applications from patients. Once an application for patient financing is submitted, someone from the practice places a call to the financing agency to relay the salient information from the application. The agency then runs a credit check on the patient to determine the amount of financing available and how much payments will be. The entire process takes mere minutes.
Advantages For Both Patients And Practices
The main reason for lag in payments from patients is because medical bills are prioritized differently than immediate cost of living expenses. Some patients simply cannot afford to pay the amount on the invoice in one lump sum. Patient financing spreads out the cost of medical expenses over simple and manageable monthly payments. This increases cash flow, and guarantees monthly payments, as opposed to waiting on customers to pay at the end of the aging window on open invoices or worse, having to resort to collection services. Additionally, patient financing allows practices to offer incentives to qualifying applicants, such as zero interest for the first three months. By offering these specials, a medical practice can quickly grow their business.
Patient financing is a great source of free, passive advertising. When patients have payment options, they tend to speak very positively of the medical practice. This type of financing also has payment card options, branded with the practice’s logo, lending even higher visibility.
Find Out More
If your healthcare center or practice can benefit from a patient financing program, call Vantage Commercial Financing at 913-543-4242. Our team of financial experts will work with you directly to to structure a solution to help you improve your cash flow and reach your goals.