Stanton Financing Guide

Medical supply companies in general are very profitable enterprises. However, most medical supply companies operate on a very tight cash flow. Unfortunately, the challenging billing procedures and slow payment cycles of insurance companies, HMOs and Medicare/Medicaid create a situation where many companies wait 30 to 60 days before getting paid.

Cash flow can get even tighter if the company’s sales grow, or if the owners decide to open new locations. When this happens, most company owners try to obtain bank financing through a loan or line of credit. However, qualifying for bank financing is incredibly challenging as they will only lend money to a business that shows profits for three straight years and can provide audited financials.

There is a financing alternative in the healthcare industry that has been used with success with medical supply companies. This solution provides you with quick financing based exclusively on your sales. Furthermore, since financing is tied to sales, the line of financing grows as your sales grow. The solution is to factor your medical insurance claims using medical receivables factoring.

Medical factoring provides you with immediate financing based on your slow paying insurance and Medicare/Medicaid claims. Rather than waiting 30 to 60 days to get paid, with medical factoring you can get paid in a few days. This frees up significant cash, allowing you to finance operations, and more importantly, to buy supplies and fuel new sales.

As opposed to bank financing, where the bank lends you money, the factoring company buys your invoices and pays you immediately for them. The process is fairly straightforward. But more importantly, this also means that you are free from the traditional bank lending requirements. Medical receivables factoring is easier to qualify for, and often, the owners’ personal credit is not a consideration.

Factoring your medical receivables can be an ideal solution for your medical supply company if your main challenge is that you cannot afford to wait up to 60 days to get paid by insurance companies. If that is the case, medical factoring should provide you with the working capital you need to operate and grow your business.

About Invoice Factoring Group

We can provide you with a free medical factoring, medical receivables factoring or invoice factoring quote for your healthcare company. Marco Terry, the president, can be reached at 1 866 730 1922.

Copyright (c) 2006 – Commercial Capital LLC. Article may only be reprinted if it is not modified and all links are kept live.

Venture capital backed businesses often have as a major objective getting on the “fast track,” that is, seeking very rapid growth toward a liquidity event, such as a sale or public offering. When this is the case, the early performance of the business is under rather close scrutiny by the initial investors, and will undergo very detailed analysis by prospective buyers and investors as their decision on commitment to the investment nears.

The new round of investors must analyze what they are acquiring besides the physical assets of the business. They are investing in or obligating themselves to the continued operation of the business, and a performance level that justifies the amount of the investment. Prospective investors must assess the environment in which the company is operating, and generate a forecast of how far it might go under their stewardship.

Did the company enjoy some “first mover” advantage in the early performance figures, which the competition has since neutralized? Are there some patents or processes that will keep the company ahead of the curve for a while longer?

The business must be evaluated as an entry in a competitive system. The state of competition, and the relative strength of the business within the market are strong indicators of the business’ prospects for surviving and thriving. Is the brand strong, highly recognizable, thought well of? Is it extendible, or already being stretched? Is there a strategic “pruning” that could improve the business’ focus and prospects?

If there has been a decline in the number of competitors, investors must assess whether it is normal turnover in a dynamic marketplace, or whether the revenue model for this type of business is flawed.

Another consideration is whether there is some untapped value in the company. Perhaps it has been strapped for cash, when a vigorous (and expensive) ad campaign could improve its competitive situation dramatically. Possibly, it is only one product or process from a major breakthrough, and fresh capital could enable an acquisition that solves the problem. There may also be some cross-marketing or strategic partnership opportunities that could take the business to the next level.

The history of sales growth within the company and in relation to similar businesses is another measure of company progress. Seasonal fluctuations can be significant when we have a relatively short history to consider. For example, how much better was this holiday gift-giving season than last? Are there any cyclical issues at work? Is ours a luxury product that flourishes only when times are prosperous?

How are the longer-range patterns of change in the industry going to affect the company? Are they well positioned for the wireless, broadband, palm-size, global world we are becoming? Are there any changes in the regulatory atmosphere that could have an impact? Are they a relatively high-cost provider in an industry that is becoming increasingly price driven?

When the business and the market have been analyzed, the probable sales volume of the business can be forecast. In rapid growth companies, sales are frequently expected to be accelerating. Unlike traditional sales forecasting, we are not simply looking at minor changes in slope of a 10-year sales increase “ramp.”

If a specific month of our second year showed some percentage growth in sales over the comparable month of our first, should we extend this rate into the third year? Since the company is so new, are the forecasts from the original business plan still useful? How well has the company done so far with respect to plan?

The reliability of a forecast is always uncertain. Attempting to forecast in today’s dynamic environment is especially difficult. We are in a period of rapid technological change that has shortened the business cycle dramatically.

Past performance is no guarantee, and often not even an indicator, of the future. Still, the basic value in making a forecast is that it forces the investor to look at the future objectively. A forecast does not eliminate the need for value judgments, but it does require the forecaster to identify elements influencing the future.

John B. Vinturella, Ph.D. has almost 40 years experience as a management and strategic consultant, entrepreneur, author, and college professor. For 20 of those years, Dr. Vinturella was owner/president of a distribution company that he founded. He is a principal in business opportunity sites jbv.com and muddledconcept.com, and maintains business and political blogs.

A person involved in litigation of any kind, say a malpractice or an accident, is rarely a lawyer. He or she does not have the least idea as to ‘how to go about the situation and recover the losses’. To top it all, often, their savings will not suffice in any way to fight the case.

Hence, they seek the help of an expert attorney. The hired attorney is one who is an experienced expert in the kind of case the person is involved in. For instance, if it is a case of dental malpractice, the client approaches an attorney specializing in the same field. Once the attorney prepares the case and files, he or she negotiates with a suitable Litigation Financing Company.

Litigation Financing Companies are known to offer litigation loans or take care of the expenses of needy clients to fight the case. Though called litigation loans, they are in fact an advance or an investment that is free from monthly payments. The companies do not give loans or pre-settlement advances to just any individual. When the attorney or the individual approaches the company, it first evaluates the case for its case worthiness. Based on its analysis, it fixes up an amount as loan. In return, the company buys a portion of possible settlement charges due to the individual. The company recovers its share from the settlement charges entitled to the individual only after the case is won.

Similarly, the company stands to lose if the individual or plaintiff loses the case. The situation is the same, even if the individual gets a very small amount as settlement charges. In short, the company cannot recover its funds if the individual does not get a good recovery or loses the case. As such, the company runs the risk when transferring funds for every litigation case. But the client has to make an initial payment to the company he or she is availing to for Litigation Financing. Since the fee charges are on the higher side, one has to take the guidance from the attorney. Litigation Financing Companies handle a range of cases. While some Litigation Financing Companies give advances for personal injury, auto accidents, ceiling collapse cases, there are others specializing in commercial and patent Litigation Financing.

Litigation Financing provides detailed information about litigation financing, commercial litigation financing, litigation cash advances, litigation financing companies and more. Litigation Financing is the sister site of Lawsuit Funding Companies.