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.

Within the health care industry, there are basically two types of companies that tend to have cash flow issues—Medical providers (i.e. hospitals, physicians’ groups, medical practices, etc.) and the vendors who sell to medical providers (i.e. medical staffing agencies, medical transcription services, outsourced medical coding companies, etc.).

Medical providers suffer from cash flow issues when third-party payers take months to pay for them for their services, forcing those providers to hold off on paying their vendors. Needless to say, when medical providers take their time paying vendors, it has a profound effect on the vendors’ cash flow as well.

Third-Party Medical Receivable Factoring Decoded

Medical receivables factoring (often referred to as third-party medical receivable factoring) introduces a third party payer (i.e. Medicaid, Medicare or private insurance carrier) into the invoicing process. Specifically, medical factoring works like this:

• The medical provider sends its bill to a third-party payer (i.e. Medicaid/Medicare, HMOs, private insurances, personal injury lien settlements, or worker’s compensation insurances, etc.) for the medical services performed.

• At the same time, the medical provider supplies a copy of the invoice to a third-party medical receivable factoring firm.

• The factor will purchase the provider’s invoice and advance up to 80% of the expected net collectable value within 24-72 hours.

• The medical factor retains the 20% (reserve) to use as a buffer in case the medical provider’s bill is not paid or if there was an error in the billing.

• Once the medical factor is paid in full for the invoice it purchased, the reserve, less the factoring fee, is released back to the provider.

Doctors’ offices, medical clinics and laboratories, ambulatory services, hospitals and nursing homes – All of these companies can greatly benefit from selling their invoices to a medical factor. All of these medical providers can use factoring to bridge the cash flow gap that is oftentimes created by slow payments from insurance carriers and other third-party payers.

The Other Type of Medical Factoring—Health Care Vendor Factoring

Even though health care vendor factoring may not be as well-known as third-party medical receivable factoring, it’s still an important piece of the health care cash flow puzzle. Medical providers routinely wait to pay their vendors until after they receive payments from Medicare, Medicaid and/or insurance companies. Specifically, temp nurse staffing agencies, medical transcription services, outsourced medical coding companies and outsourced medical billing services are all examples of health care vendors that tend to have cash flow issues as a result of slow paying medical providers.

Furthermore, the health care vendor factoring process is similar to the third-party medical factoring process, sans the third-party payer:

• The health care vendor sends invoices to a medical provider for services rendered or goods provided.

• The health care vendor also sends a copy of those invoices in addition to any supporting documentation (i.e. signed time sheets) to a factoring firm familiar with funding business to business transactions within the healthcare industry.

• The factoring company purchases the invoices and advances somewhere between 70-90% of their face value.

• Similar to the third-party medical receivable factoring model, the health care factoring firm will hold the remaining 20% (reserve) as a buffer in case a provider disputes the invoice and/or doesn’t pay it promptly.

• The reserve, minus the factoring fee, is remitted to the vendor upon receipt of payments from the medical providers.

As you can see, although a little less well-known, health care vendors that provide services to slower-paying medical providers can also benefit from medical factoring.

Now that you know the difference between health care vendor factoring and third-party medical receivable factoring, the next step is to locate factoring firms that can sufficiently close and manage those types of deals. When researching factoring firms, a good place to start is the International Factoring Association (http://www.factoring.org). The last step is to find medical business owners in need of factoring!

Nikki Flores is a Consultant Liaison for PRN Funding, LLC, which is an extraordinarily focused niche player in healthcare factoring.

PRN Funding exclusively factors the accounts receivable of companies that sell goods or provide services to healthcare providers.

What differentiates a factoring company from a bank?

First and foremost, since factoring is not a loan, there is no debt on your company’s balance sheet. Moreover, factoring firms have the ability to make a quick decision regarding your medical billing funding options, while banks may take weeks-even months-to approve a loan.

Furthermore, factors determine lines of credit based on the creditworthiness of your customers, while banks focus on your company’s financial history and cash flow. In other words, a funding agency looks to your company’s future while banks place emphasis on your company’s past.

How long does it take to be approved for factoring funding solutions?

In general, a funding agency will begin its due diligence process after receipt of a signed contract. This process can last anywhere between 1-5 business days, and money is moved at its conclusion. Thereafter, a company can receive funds in as little as 24 hours within verification. See our factoring process and learn our medical billing funding options can benefit your business.

What information does a business owner need to provide to a factor in order to begin the process of coming up with funding options?

Required paperwork varies among factors, however, there are a handful of documents that most all will expect. Most likely, the owner of a medical company will be asked to provide a copy of your company’s most recent accounts receivable and accounts payable aging reports, Articles of Incorporation or Organization filing, copy of owner’s driver’s license, voided copy of a check, a master customer list, a sample contract, and of course, invoices to factor.

What happens if my customers don’t pay an invoice?

This depends on whether your company entered into a non-recourse or recourse agreement with the factor. Within a non-recourse agreement, the funder assumes the credit-related loss. However, most medical billing solutions (factors) do not assume the risk of non-payment due to disputes regarding quality or timeliness of your company’s medical billing services. On the other hand, if you have a recourse agreement, your company will have to reimburse the factor for any unpaid invoices. This is usually accomplished by having the past due invoice deducted from the next advance or replacing it with another factored invoice.

Can a medical billing service qualify for funding if it’s a new business or has past credit problems (i.e. bankruptcy, IRS liens, and judgments)?

Yes. A reputable medical billing factoring company will still consider your application if you have credit problems or a recent bankruptcy because the credit decision is based primarily on the creditworthiness of your customers. However, tax problems are handled on a case-by-case basis, so be sure to let you funder know if you have any IRS issues.

Philip Cohen is the founder and president of PRN Funding, LLC, which is a focused player in the medical invoice funding marketplace. Through a process known as factoring, PRN Funding provides medical business owners with the financial resources needed to grow and effectively compete in the industry. With no minimums or fixed terms, PRN Funding (http://www.prnfunding.com) provides medical companies with flexible and immediate access to capital.

Article reprinted with permission by PRN Funding, LLC.

Defined as clinical healthcare professionals that assist physicians and nurses, allied health personnel are an important part of the healthcare system. Hospitals, nursing homes and clinics are beginning to feel the stress of the aging Baby Boomer population, as these institutions are seeing the allied workforce retiring in droves at the same time that patient intake is increasing. Given the circumstances, now seems like a perfect opportunity for savvy business owners to develop their staffing agency to meet the new demands.

However, growing a business takes money…

Allied health staffing agencies need cash to cover the costs of advertising, recruiting, and expanding offices. Unfortunately, right now is a bad time for businesses who are seeking ongoing financing because banks have tightened their lending criteria as a result of the national credit crunch. Moreover, the economic decline instigated a jump in small business credit card interest rates in addition to overly-obtrusive credit restrictions on small business owners.

This situation puts allied health staffing business owners in a conundrum. On the one hand, now is a prime opportunity for supplemental staffing agencies to expand, but on the other hand, no one seems to be lending to businesses these days.

Luckily, accounts receivable factoring companies are still lending.

What’s more, factoring firms do not have the same arduous loan criteria as their conventional counterparts. Here are a few ways that allied health staffing factoring differs from traditional bank loans:

Quick Funding Application Process

Factors generally do not require a history of profitability, personal financial statements, business plans or personal guarantees. Because there are fewer documents needed, allied health staffing companies can receive their first funding within 3-5 days of returning factoring documentation.

No Long-Term Obligation

Many factoring firms will not require business owners to sign a long-term contract. In addition, once the staffing agency has been approved, it can stop or start factoring at any time.

Access to Unlimited Capital

With bank financing, once a company hits the credit limit, it cannot borrow more cash. Invoice factoring is the only source of business financing that grows with the company’s sales. As sales increase, more money becomes immediately available to the agency owner.

No Liability on the Company’s Balance Sheet

Because factoring is not a small business loan, there is no debt, and there are no monthly payments to ‘muddy up’ the company balance sheet.

Allied Health Staffing Industry Expertise

Banks work with all kinds of companies, so they might not be familiar with the intricacies of the industry. There are factoring companies out there who understand the ins and outs of the allied health staffing industry, so business owners won’t have to worry about teaching a factor about their business model.

The allied health workforce will continue to play an integral role in the healthcare system as the demand for their services continues to rise. This need presents a great opportunity that allied health staffing agencies can use to their advantage.

In order for these staffing agencies to acquire new customers, they will need to hire additional employees and possibly expand their infrastructure. Unfortunately, these staffing agencies also need to accomplish this growth during a time when it has become increasingly more difficult to obtain traditional financing. Fortunately, those allied health staffing agencies can use factoring as a flexible financing solution to the cash flow problems that can arise during periods of growth.

Philip Cohen is the founder and president of PRN Funding, LLC, which is an extraordinarily focused niche player in allied health staffing invoice funding. Through a process known as factoring, PRN Funding provides allied health staffing business owners with the financial resources needed to grow and effectively compete in the industry. With no minimums or fixed terms, PRN Funding provides staffing companies with flexible and immediate access to capital. 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 reprinted with permission by PRN Funding, LLC.

To a bank looking at a loan application, neither situation is attractive. On the contrary, to some factors both of these situations might sound very appealing, and this article explains why.

When a nurse staffing business is just starting out, it lacks two vital attributes for a bank to consider it as a good loan candidate. First of all, a startup staffing company does not have any tangible assets with which to secure a loan. In fact, the company’s primary asset is its accounts receivables, which unfortunately is not concrete enough for a bank because those can disappear quickly and without notice.

Banks look for assets that are more tangible such as real estate, machinery or equipment-something physical that they can place a lien on wherever it goes so that in the event of default, the bank can still lay claim to and liquidate that collateral.

On the other hand, there are some nurse staffing factoring firms that are willing and able to work with startup companies. Rather than loaning money, factors provide cash based on the quality and liquidity of a staffing agency’s assets, specifically their accounts receivable. In the event that a staffing agency was to go out of business, a factor can continue to collect on invoices that were issued previous to their closing up shop.

The second area that could prevent a new staffing agency from obtaining a business loan is that banks provide loans on the basis of a company’s historical financial performance rather than its potential for success. Temporary nurse staffing companies who are just starting out have no financial history, which is viewed by a bank as just as risky as having a bad one. Moreover, banks traditionally will not consider loaning money or extending credit to companies who have been in business for fewer than three years because of the high failure rate for new businesses.

Once again, some nurse staffing factoring companies have a different approach to funding new businesses and are not so easily swayed by the fact that they are just opening their doors. For starters, factors consider the quality of a company’s accounts (the credit-worthiness of their customers and the validity of their invoices) which allow them to provide funding even when the company is new. Nurse staffing factoring firms see a different picture when investigating the credit-worthiness of their clients’ customers. As long as the client is staffing nurses in good paying medical facilities, and the factor is comfortable that they will get paid for the invoices that they buy, the actual agency’s credit becomes a minute detail in the grand scheme of things.

As I said previously, another time when nurse staffing agencies find themselves in need of cash is during a rapid growth period. For example, a temporary staffing company may have landed a contract with the area’s biggest hospital, and they need to hire and staff an additional 20 nurses immediately. The agency might have enough money to recruit nurses to fill the demand, but it might not have enough readily available cash to pay their nurses once they have completed their shifts. This situation is quite common in the nurse staffing world because business owners are expected to invoice and make payroll on a weekly basis while the medical facilities they staff regularly can take up to three months to pay for those shifts.

Now let’s analyze this situation from a banker’s perspective. Banks consider a company’s ability to repay a loan based on its historic earnings cash flow. Unfortunately for our growing temporary staffing company, its previous income and cash flow is much smaller in comparison to its increasing need for financing. Sometimes a nurse staffing company’s previous year’s income is enough to secure a bank loan, that is to say, if the staffing agency wanted to stay at its same operating size. More often than not, a staffing company goes to a bank looking for a larger loan than what last year’s earnings could justify because they intend to use the loan to double or triple last year’s revenues. Unfortunately, a bank wouldn’t feel comfortable loaning money to a company based solely on its potential to grow. Once again, banks look at the agency’s profitable operating history to justify lending. So the bank lending process eventually turns into a never-ending cycle-the nurse staffing company needs money to grow, but the bank needs to see a history of growth to give out money.

Enter a nurse staffing factor. Though a factor will look into a growing nurse staffing business’s operating history, it’s not a deal killer if the company doesn’t have a track record of high earnings because a factor is generally more concerned with the future of the business. A good rule of thumb to remember: banks look to a company’s past to justify approving a loan, while factors look at a company’s future growth potential to justify advancing cash on their invoices. Going back to our example, the fact that the staffing agency just signed a contract with one of the biggest and fastest paying hospitals in the area means nothing to a bank, but it is great news for a nurse staffing factoring firm.

I hope that the factoring information that I’ve shared with you in this article have helped you realize how hard it is for a new or growing nurse staffing company to be approved for a bank loan. Fortunately, there is another good alternative business financing option-nurse staffing invoice factoring. Selling their invoices to a nurse staffing factoring firm is a much more lucrative option for agencies who are just opening their doors or who are going through a period of rapid growth.

Philip Cohen is the founder and president of PRN Funding, LLC, which is an extraordinarily focused niche player in the temporary nurse staffing financing market place. Through a process known as factoring, PRN Funding provides temporary nurse staffing business owners with the financial resources needed to grow and effectively compete in the industry. With no minimums or fixed terms, PRN Funding (www.prnfunding.com) provides healthcare service providers with flexible and immediate access to capital.

Article reprinted with permission by PRN Funding, LLC.

If you can’t think of any off hand it’s because it hasn’t happened. The most recent example of such inefficiency has been the “cash for clunkers” program.

This program started almost two years ago (July 2009) and many car dealerships are still awaiting payments! The government stepped into the healthcare industry some 45 years ago and things have regressed to what we have today; and inefficient, overregulated, underfunded, bureaucratic nightmare soon to be encumbered with more regulations and less financial infusion….results…medical professionals can’t get paid efficiently or sufficiently.

Borrowing and/or Factoring are the only solutions to get cash flow moving.

On a grandiose scale, factors and other finance organizations seek to bring on clients with a monthly funding facility requirement well over one million dollars. Wells Fargo, CIT, Textron GE, and other huge commercial lenders have their “pick of the litter” when it comes to these higher volume potential clients (borrowers). In many occasions medical providers generating over one million dollars per month in receivables have credit profiles sufficiently strong for a bank, and if not, certainly strong enough for a non-bank asset based lender. Therefore the question can be posed; as a financial intermediary, factoring broker, referral agent..etc…how can I find the best way to participate in the ever-growing healthcare finance market?

Flying way below the radar of the massive lenders cited above, are the modest sized medical providers such as durable/home medical equipment providers, home health providers, single or multiple physician practices, imaging centers, dialysis centers, labs, ambulatory surgery centers, drug dependency and rehabilitation centers, physical rehabilitation centers, urgent care clinics…and a plethora of others. These modest healthcare providers ARE the opportunity to develop a good business as a factoring broker referral source. Who among the finance community would entertain a factoring transaction as small as $25,000 per month in volume, up to $400,000 (or higher)? In the highly specialized field of healthcare finance, Factors with sweet-spots of $100K-$300K are very few.

We at Xynergy Healthcare Capital LLC (XHC) have been in the healthcare factoring industry for over a decade and our team members have been some of the first pioneers in healthcare factoring. XHC is a new name, but, with highly experienced professionals.

Focusing on the modest sized providers as listed above, XHC wants to be your first call when you’ve found a prospect. You find the interested provider, set up the conference call and XHC takes it from there. You can participate as little or as much in the process as you want….but the industry pro’s at XHC will do that first conference call to correctly and positively explain the process and qualify the prospect.

No up-front fees, all underwriting costs taken from first funding. Factoring Broker kits are always available. Stepping into a new market may be uncomfortable; however XHC will hold your hand through it all. This industry is ready for explosion, join in with us.

For more information contact Fred Leder of Xynergy Healthcare Capital at (954) 489-6460 or by email at fleder@xynergyhealth.com.

About the Author: Fred Leder, a name well recognized in the healthcare finance industry, has been actively involved in this highly specialized niche for over a decade. Following fifteen years as a fixed income securities trader with a regional securities dealer firm. Leder joined and helped build Sun Capital HealthCare Inc. in Boca Raton Florida, and remained there over ten years until starting Xynergy Healthcare Capital LLC in early January of 2011. He has been guest speaker at numerous medical industry conferences, to include, The Florida Medical Association, Wealth Management Group of the Florida Bar Association, Hospital Finance Management Association, MedTrade, Florida Association of Certified Public Accountants, many ACFA Conventions, and regional training and educational seminars.

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Factoring companies can help by providing small business funding to Nurse Staffing Agencies, but should they choose recourse or non recourse factoring?

This article from guest author Philip Cohen of PRN Funding explains the difference.

Recourse and Non-Recourse Nurse Staffing Accounts Receivable Factoring: What’s the Difference?

By: Philip Cohen

What is nurse staffing recourse factoring?

For the most part, recourse factoring is the most common and the most affordable nurse staffing financial help available to business owners. In this type of factoring arrangements, the accounts receivable factoring company will require an agency owner to buy an invoice back if the client does not pay within a specified amount of time. Moreover, the nurse staffing agency owner accepts full credit risk for any and all accounts receivables that it sells to the factoring company.

What is nurse staffing non-recourse factoring?

The other accounts receivable factoring option that owners have is non-recourse factoring. In a nutshell, non-recourse nurse staffing financing agreements hold the factor entirely responsible for an unpaid invoices if the following is true:

If the hospital, nursing home or vendor management system (VMS) goes bankrupt during the time an agency owner’s invoice was factored.

If the hospital, nursing home or VMS goes out of business during the time an agency owner’s invoice was factored.

It’s important to keep in mind that non-recourse accounts receivable factoring does not cover the following situations:

• Very late payments when there is no insolvency
• Disputes/challenges with nurse staffing services
• General collections issues

Naturally, both options have pros and cons that an owner should consider before choosing which type of agreement to make. Typically, they will receive lower factoring fees and/or higher advance rates if they choose to enter into a recourse factoring relationship. On the other hand, a non-recourse accounts receivable factoring arrangement buys nurse staffing business owners’ protection if a hospital nursing home or VMS goes bankrupt. Ultimately, agency owners need to review their accounts receivable factoring contract in detail with a lawyer to determine which type of arrangement, recourse or non-recourse, is the best fit for their agency.

About the Author: Philip Cohen is the founder and president of PRN Funding, LLC, which is an extraordinarily focused niche player in the healthcare staffing invoice financing 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. 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 – Recourse and Non-Recourse Nurse Staffing Accounts Receivable Factoring: What’s the Difference?

Accounts receivable factoring is available to a variety of industries including medical, construction, transportation, manufacturing, staffing, and other business to business services.  Factoring companies provide an advance on invoices so businesses don’t have to wait 30-60 days for payment from customers.

Improve your chances for approval by keeping four qualifiers in mind when courting receivable financing:

1) What’s Your Type?

Factoring firms tend to specialize in certain types of invoices. They have fine-tuned their systems to fit a particular niche of the industry. If their specialty is medical factoring then they might not be into transportation factoring.

That’s why the first round of qualifying questions will include:

“What industry does the business work in? What are the goods or services they provide?”

While some companies offer funding on a variety of invoice types it pays to know any preferences upfront to avoid turndowns.

2) Size Matters

The size of a transaction matters to the factoring company. Make sure you know,

“What is the average monthly invoice volume and desired credit facility?”

Larger companies might require a minimum volume of $50,000 per month. If that’s the case then it’s better to send the smaller deals to a small business factoring specialist.

3) The Company They Keep

Good news! The credit worthiness of the business is not the primary concern. With invoice funding new businesses and other companies deemed “unbankable” are able to access working capital.

That means the main focus is shifted to the quality of the customer paying on the invoice, leading funders to ask:

“Who are the customers and how long do they take to pay?”

A factoring company generally likes to see customers or debtors paying on invoices in 30 days, although some will accept 60 to 90 days. They will look to the credit of the customer and ask for an accounts receivable aging report. If the risk of timely payment seems too great they could decline funding invoices owed by a particular customer or altogether.

4) Let’s Be Exclusive

Factors provide working capital with an advance on invoices. They need to know they are first in line to receive payment on the account receivables purchased. They’ll want to know,

“Has the business obtained prior financing with another company?”

They are trying to determine if existing claims have been filed against the receivables, making a lien search a standard part of underwriting. If it reveals there is already a UCC-1 Financing Statement of record the factoring company will want it terminated or subordinated by the creditor.

It pays to be prepared. Whether business owner or factoring broker be sure to know the answers to these questions. Then do your homework so the funding request goes to an investor that fits the deal. It will save you and the factoring company time, frustration, and rejection!

In fact, there are many companies (i.e. respiratory therapist staffing agencies, radiology tech staffing firms, and physical therapist staffing agencies) that can greatly benefit from all that allied health staffing factoring has to offer. Namely, growing their companies without having to worry about how long it will take for their customers to pay them.

In order to help clear up any healthcare factoring misconceptions, this article will explain the allied health staffing factoring process step-by-step…

1.  The customer (i.e. hospital, medical clinic, nursing home, etc.) approaches an allied health staffing company to fill an open shift.

2.  If it’s a new customer, the factoring firm performs a credit check on the medical facility and if approved, determines a line of credit for that customer.

3.  The staffing firm provides the medical facility with a temporary employee to fill the shift.

4.  The agency issues an invoice to the medical facility for the shift, making sure to include the factoring firm’s remittance information directly on the invoice.

5.  At any time after the invoice has been issued, the allied health company submits a schedule of accounts receivable for purchase to the factoring firm. In addition to the invoice, this schedule also includes any supporting documentation (i.e. signed time-sheets).

6.  The invoice funding company will contact the staffing agency’s customers from time to time to verify that they are actively using temporary employees from the agency. Upon verification of the invoices, the factor will electronically advance funds within hours.

7.  Per the remittance information included on the factored invoice, the medical facility sends payments directly to the factoring firm’s lock box.

8.  Upon receipt of the payment, the factor remits the difference (reserve) between the collected amount and the advance to the agency, less the discount fee.

Selling invoices to a factor improves the agency’s cash flow, allowing business owners to meet payroll, taxes and other monetary obligations in a timely manner. Thanks to this article, business owners are able to easily familiarize themselves with the factoring process. The next step in improving their cash flow is to start researching which allied health staffing factoring firm will best meet their company’s cash flow needs.

Philip Cohen is the founder and president of PRN Funding, LLC, which is an extraordinarily focused niche player in the allied health staffing invoice financing 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 allied health staffing companies with flexible and immediate access to capital.

Article Source: Ezine Articles – A How to Guide – Allied Health Factoring

Factoring account receivables is helping health care companies through these tough economic conditions opening the door to earning opportunities for cash flow consultants.

FactoringInvestor (FI) caught up with Phil Cohen, Founder and President of PRN Funding, LLC, to fill us in on the specialized niche of healthcare funding.

FI: What transactions will your company consider funding?

PRN: PRN Funding, LLC has a very specific niche in healthcare funding. We provide factoring to vendors who sell goods or provide services to medical facilities. Moreover, our client base consists of medical staffing agencies, private duty home care agencies, medical transcription services, medical billing and medical coding companies and medical supply companies.

FI: How did you get your start in the factoring business?

PRN: Prior to founding PRN Funding, LLC, I spent the better part of a decade acquiring medical transcription firms as a national roll-up strategy. During this time, I noticed a trend. Many of the medical transcription services were well-run firms; however, they were selling their companies because of cash flow problems. Seeing this cash flow problem, I was able to identify an opportunity to help them – accounts receivable factoring. Over time, I’ve been able to expand into other healthcare vendor niches, including medical staffing, medical coding, medical billing and medical supplies.

FI: What unique benefits does your company provide?

Industry Expertise: PRN Funding, LLC understands the unique characteristics of the healthcare vendor industry. We are very familiar with traditional payment terms, industry jargon and day-to-day procedures associated with the healthcare vendor industry.

Extreme Flexibility: PRN Funding offers the utmost in flexibility to vendors who sell goods or provide services to healthcare facilities. Our clients choose when, who, how much and how long to factor their invoices.

No Hidden Fees: PRN Funding does not charge the following:

• Application Fee
• Origination Fee
• Due diligence Fee
• Legal and documentation Fee
• Administrative Fee
• Early Termination Fee

FI: What do you consider the best methods for finding deals?

PRN: Aside from our web site, PRN Funding relies very heavily on our brokers and cash flow consultants to refer us deals. In fact, we value our referrals from brokers so much that we’re running a special promotion right now. The next 15 people who refer PRN Funding a deal will receive a $25 Starbucks gift cards in addition to the normal commission. We will send out the gift card, regardless of whether the lead becomes a client or not.

FI: How do you handle commissions to brokers or consultants?

PRN: We pay our brokers 10% of the fees we make for the life of the deal.

FI: What advice would you give to new professionals just starting out in the industry?

PRN: Now is a great time to get into the cash flow industry. Traditionally, small business owners relied heavily on credit cards to fund their business operations when they were not eligible for bank financing. The current economic situation has recently prompted many credit card companies to drastically reduce credit lines and raise interest rates for their customers who use small business credit cards. As a result, these business owners are in desperate need of a new alternative financing method to fund their business, and cash flow consultants have all of the tools to match those business owners with the appropriate funder.

FI: What is the most common business mistake you see people make?

PRN: The most common business mistake I see brokers make is that they present a lead to us without pre-qualifying it beforehand. It’s important for a broker to accurately assess a prospect’s need for funding and then match it with a funder who understands the prospect’s business model.

FI: Given the current economy, have you made any changes in the way you transact business?

PRN: In light of the changing economic climate, PRN Funding made the decision to branch out into a brand new healthcare funding niche. We formally launched PRN Funding’s home care factoring program in February. We recognized how long it takes for state-funded programs to pay private duty agencies, and we wanted to address the dilemma by offering these companies a factoring solution.

In addition, although there are more business owners applying for factoring as a result of the economic crisis, the quality of some of those applicants has gone down. Therefore, PRN Funding has had to tighten up on our due diligence process. Things that we may have been lenient on in the past, we are no longer able to do so.

FI: Where can people contact you to obtain more information?

PRN: Visit our web site: www.prnfunding.com

Call our toll-free number 866.776.5407 and ask to speak with our Broker Liaison, Nikki Flores

Visit the Cash Flow Consultant and Factoring Broker News section of our blog: www.TheFactoringBlog.com

FI: Is there anything else you would like to share with our readers?

PRN: It’s important for brokers and cash flow consultants to know that in general factoring firms do not operate as a one size fits all operation. Each factor has its own funding “sweet spot” that separates it from other factoring companies. For example, some factoring firms require a minimum ongoing factoring amount, while other specialize in factoring companies in one specific geographic region. In addition, there are other factoring firms who cater their services to a specific industry. Therefore, brokers should look at each transaction as a unique opportunity and strive to match it with the appropriate factoring firm.

FI Summary: Helping businesses raise cash through factoring account receivables is one of many cash flow categories where consultants can earn commissions by referring transactions to funding sources.  Factoring health care invoices is a specialized niche of the factoring industry