Making Sense of Medical Factoring

Many factoring brokers steer clear of medical receivables factoring because they think it’s too hard to get a health care deal funded. I’m here to tell you otherwise.

All you need is a general understanding of the types of companies that can benefit from medical factoring and a couple of strategic partnerships with the right health care factoring firms. Read more

Common Objections Encountered From Invoice Factoring Prospects

Although invoice factoring has become a bit more apparent in business finance today, misunderstandings, fears and objections are still quite common.

Being prepared to hear and address objections or questions is the most professional approach to these encounters.

Fortunately, the issues discussed herein are the most common concerns expressed by prospects and from my experience in both commercial and healthcare factoring will arise in almost all presentations or conference calls. Read more

Should You Be Marketing For Factoring Business Online?

Wondering if there is an opportunity to find factoring business online?

Consider the average number of times per month someone searches these terms online:

• Receivable Financing – 12,100
• Invoice Factoring – 14,800
• What is a Factoring Company? – 18,100
• Factor Company – 27,100 Read more

Factoring 101: Don’t Make It Difficult

One thing I love about the factoring industry is that once we remove all the layers of speculation, it really is a straight forward business.

People new to the industry, both brokers and companies thinking about using factoring services, have an uncanny ability of making things more difficult than need be.

Terms like “hold back,” “reserves,” “advance rate,” and “points” can put people on edge.

Add to the fact that just about everyone tries to compare “factoring vs. bank loans” and it is no wonder Read more

How to Qualify a Factoring Prospect by Asking Three Simple Questions

It’s a factoring broker’s job to deliver companies with cash flow issues to the appropriate funding source. Although this task sounds easy enough, in reality, it’s not always so simple. Picture this scenario:

You have a client in need of cash flow who has been in business for a year, has three large customers and Read more

Small Business Turns to Alternative Financing

While the demand for small business loans is up, a recent Federal Reserve survey shows the majority of banks are keeping credit tight. This is causing small business owners to turn to alternative financing options. The factoring industry is well-versed in how this need is fueling demand.

Two recent articles in CNN Money covered the ongoing small business financing challenges and highlighted one possible solution…

Merchant Card Advances Read more

Starting Your Own Factoring Business? It’s Your Call

At some point in our working lives many of us think about starting a business and being our own boss. The thought of Read more

Using a Factoring Company

One of the side effects of the economic crisis is that more companies need business financing while less institutions were willing to provide it. Because of this, companies started looking for other options to business loans. One of the options Read more

Medical Coding Factoring Terms

When a medical coding service is considering selling their receivables to a factoring firm, it’s important to familiarize themselves with some common factoring terminology. This is a quick reference guide outlining some of the more commonly-used factoring terms to help medical coding business owners navigate seamlessly throughout the entire factoring process.

ACH (Automatic Clearing House) – One method factoring companies use to electronically transfer funds into an Account Creditor’s account. When an ACH is initiated, the funds are made available electronically in the Account Creditor’s account on the next business day.

Account Creditor – You, the client and provider of medical coding services.

Accounts Receivable – The money that is owed to an Account Creditor for the services it has provided to customers on credit. The amount indicated on an issued invoice.

Advance Rate – Money provided immediately to the Account Creditor-expressed as a percentage of the total invoice amount. Frequently, factoring firms advance between 70-90% of the invoices it buys.

Account Debtor – The purchaser of medical coding services who is responsible for paying the invoice, (a.k.a. your customer.)

Cash Flow – The measurement of cash coming into a company via accounts receivables and cash going out of a company via accounts payable and payroll.

Collateral – An asset that is promised or given to a funder to guarantee the discharge of an obligation by the Account Debtor.

Discount Fee – A fee assessed by a factor that purchases accounts receivable. Traditionally, the discount fee is determined by the size of the invoice, the length of time it takes to collect the funds and the creditworthiness of the customer.

Face Amount or Face Value – The total amount of an invoice.

Medical Coding Factor – A company that provides operating capital to businesses through the purchase of their invoices.

Medical Coding Factoring – An alternative financing arrangement, in which a factor purchases the accounts receivables of a company, advances a specific percentage of the invoice immediately and then collects on those invoices.

Medical Coding Invoice – A legal debt instrument which indicates the amount due from a customer to pay for delivered medical coding services.

Non-Recourse - The period of time in which the accounts purchased by the factor remain the factor’s accounts and do not revert to the Account Creditor if unpaid due to an insolvency event. The factor accepts full credit risk for any and all accounts that it purchases during this period.

Notification – The process whereby the factoring company communicates to an Account Debtor that an invoice has been purchased from the Account Creditor and that the Account Debtor is to pay the factoring company directly.

Recourse – The period of time in which accounts purchased by the factor are able to revert to the account creditor if unpaid due to an insolvency event. The client accepts full credit risk for any and all accounts that it sells to the factor during this period.

Reserve – Amount of money that is not immediately provided to the company factoring its accounts receivable when the account is purchased by the factor, expressed as a percentage of the total invoice amount. (Advance Rate + Reserve = 100% of Total Invoice)

Reserve Release – The Reserve, minus the discount fee, is transferred by the factor to the client after payment is received.

UCC (Universal Commercial Code) – The laws dealing with commercial business.

UCC-1 – The financing statement (Form UCC1) filed to perfect a security interest in named collateral.

Keeping this medical coding factoring terminology guide close by during conversations with factoring firms will help medical coding business owners better be able to speak and understand the “factoring language.” Using this article as a reference also allows medical coding business owners to save time by focusing on asking the right kinds of questions to locate the best medical coding factoring firm for their company.

Philip Cohen is the founder and president of PRN Funding, LLC, which is an extraordinarily focused niche player in the medical coding invoice funding market place. Through a process known as factoring, PRN Funding provides business owners with the financial resources needed to grow and effectively compete in the industry. With no minimums or fixed terms, PRN Funding provides medical coding agencies with flexible and immediate access to capital. We give you the freedom to factor what you want, when you want, whom you want, for as long as you want. Prior to founding PRN Funding, Mr. Cohen was an executive officer of The MRC Group, a national provider of Medical Transcription Services. Contact Philip Cohen at toll-free 866.776.5407 or via email at pcohen@prnfunding.com. Please visit PRN Funding, LLC on the web at http://www.prnfunding.com/

Article Source: Ezine Articles – Medical Coding Factoring Terminology

Learn Factoring – The Alternative Finance Industry Exposed!

Last year small business lending was slashed by over $13 billion dollars and this trend is poised to continue.

Join us Tuesday, March 23rd at 2 pm or 9pm EST to discover how to profit with alternative financing. Read more

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