Factoring is a good option for nursing homes, and yet finding the right medical factoring company is often a challenge. A look at the problems and solutions in this article from PRN Funding.
“A test of a people is how it behaves toward the old…the affection and care for the old, the incurable, the helpless are the true gold mines of a culture.”
-Abraham J. Heschel
As birth rates decline in developed countries and the population ages, we must consider how we are going to treat the elderly among us. According to the US Centers for Medicare and Medicaid Services, over 12 million people will need long-term care by 2020; that comes out to about four out of every ten elderly adults entering a nursing home at some point in their lives. At this moment in history we live longer on average than ever before, so the need for quality long-term care facilities is more pressing than ever.
Industry Challenges
Skilled nursing facilities provide an invaluable service to their communities, yet often face cash flow challenges that hamper their function. Some research shows that over 40% of nursing homes face significant cash flow problems.
Elder care facilities face these problems partially because of troubles associated with Medicaid. If many of a facility’s residents are on Medicaid, the per-patient per-day payment model is not enough to cover the cost of doing business. Long-term facilities often have to turn to financing to cover expenses such as payroll, but face problems securing a bank loan.
One way for skilled nursing institutions to regulate cash flow is to factor their unpaid invoices.
Benefits of Medical Factoring
Factoring is an attractive form of financing to skilled nursing facilities that have trouble securing a bank loan. Often, long-term care facilities will not have sufficient collateral to request a loan or otherwise do not qualify. Factoring, on the other hand, is a good alternative for the following reasons:
• Likely approval
• Funds within 24 hours
• Does not increase debt
• Line of credit that grows as the facility does
Factoring is a good option for nursing homes, and yet finding the right factoring company is often a challenge because most factors stay away from medical deals.
The Problem
Factoring the invoices that are sent to Medicaid is tricky, and most factors tend to avoid it. Only highly specialized firms understand the complex issues associated with medical factoring—but sometimes it is hard to find them. Those in the skilled nursing industry have better things to do than spend time cold calling factoring companies that may or may not fit their needs.
Luckily, there is a better solution.
The Solution
While PRN Funding does not do medical factoring, we do have arrangements with niche factors that do. We know some of the best medical factors in the business, which have spent years working with healthcare institutions and can factor the invoices of a long-term care facility. By trusting our expertise instead of researching on their own, long-term care facilities will save time and money.
The elderly deserve the best care possible, and that means keeping nursing homes in business. Factoring is one way to keep healthcare facilities up and running so that they can take care of those who need it most.
Philip Cohen is the founder and president of PRN Funding, LLC, which is an extraordinarily focused niche factor in the healthcare funding market place. Visit the PRN Funding website at www.prnfunding.com for more factoring and brokering information.
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