Banks to Start Loaning Again in 2011

Did anyone see the front page of the Wall Street Journal today? There’s an inspiring article that every small business owner and future entrepreneur should read: Banks Open Loan Spigot.

According to the article, “Moody’s Analytics estimates that commercial and industrial lending in the fourth quarter has grown .02% from the third quarter, to $1.22 trillion, the first quarterly increase in two years.” Moreover, when business lending increases, it’s usually a good sign that the economy is well on its way to recovery.

Although new activity varies from bank to bank and industry to industry, JP Morgan Chase, U.S. Bancorp and Wells Fargo have all seen increases in lending and credit availability.

It’s important to keep in mind that lending typically rises toward the end of the year as companies increase inventories, so some analysts warn that the uptick may not stick around in 2011.

2011 Small Business Economic Outlook Survey Results

The PNC Economic Outlook Survey was conducted between July 29 and August 25, 2010 by telephone within the U.S. among 1200 business owners or senior executives of small and medium-sized businesses with annual revenues of $100,000 to $250 million.

Some of the results were printed in Nov/Dec 10 edition of The Secured Lender magazine. The A/R funding specialists at PRN Funding, LLC wanted to share some of the survey’s interesting findings:

  • 75% of small business owners foresee greater access to financing in 2011, though they do not anticipate applying for it.
  • 42% expect their sales to increase in 2011
  • 31% expect profits to rise in 2011
  • One-third of small business owners say weak sales/demand for service is the most important challenge facing their company today. Followed by a general concern for “changes in government policy that affect my business.”

Check out page 15 of The Secured Lender to read the rest of the survey’s results.

Medical Transcription Invoice Factoring Case Study

The medical transcription factoring specialists at PRN Funding recently invited one of our current medical transcription clients to “spill the beans: in a tell-all interview about how PRN Funding helped her MT service more than double in size. Although it’s posted on PRN Funding’s web site, we also included a copy of it on The Factoring Blog for all of our MTSO readers:

Launching a New Company
In May 2009, Terri Davis started Clear Choice Transcription, a diverse transcription company specializing in the medical field. Having spent 13 and a half years in the industry, Davis knew she would need help managing cash flow to meet payroll and keep vendors happy until the client payments started coming in. She also knew standard financing was not an option. This is when she decided to look into special medical transcription factoring.

“When we launched, our largest client was giving us overflow work only, and some of the smaller clients who were paying very quickly were not enough to fund payroll for future growth. Similar to other business owners in this industry, I did not have a lot of tangible assets to offer a bank as collateral. That’s a good thing in that there’s not a lot you need to purchase, but it made it very difficult to get standard financing,” says Davis.

A Flexible Factoring Lender
Clear Choice Transcription’s flexibility in working with their customers gives them the ability to work with different size medical practices, as well as clinics and hospitals. Clear Choice offers differing pricing structures and domestic and overseas transcription options, works within varying Electronic Medical Record (EMR) programs, and with different dictation styles and templates. And so they appreciated a lender who was flexible working with them.

That flexibility, and expertise, is what sold Davis on PRN Funding, even though they considered other funding partners.

“They were very knowledgeable in the medical transcription industry, and the information I received was very impressive. From the very beginning, they worked with me whenever we needed something a little different. For instance, we had to break a large client’s invoice down into different parts due to issues with the client’s billing system. Instead of simply saying no, PRN Funding immediately presented a very easy factoring solution and it worked out very well,” she says. “And I genuinely like the people at PRN Funding. Their response time is great and they made me feel we were on the right track in partnering with them.”

PRN has an intimate knowledge of the medical transcription industry that helps them help their clients.

“We’re unique in the medical transcription factoring industry in that before I started PRN Funding I worked for the nation’s largest medical transcription company,” says founder Phil Cohen. “So I know the industry inside and out and we have a good number of clients in the space. Having worked in the industry for such a long time, my account managers and I bring a lot of expertise to the table.”

Stabilizing Cash Flow
“In this business, as I am sure with most, without cash flow you’re dead in the water. You can’t pay your people, you can’t move forward, and growth is most times impossible,” Davis says. Medical transcription financing was a great option for Clear Choice Transcription, allowing Davis to bring in the people she needed in order to take on more work while continuing to meet payroll obligations. ”

Terri’s largest client was having some issues with their accounts payable system, getting invoices processed, and there were invoices that were aging out past 60 days,” Cohen recalls. “She was stressed about the fees involved with medical transcription funding, but it was nothing compared to the stress she would have felt if she wasn’t able to make payroll.”

Quadrupling Business Growth

Medical transcription factoring with PRN Funding gave Davis the stable cash flow she needed to quadruple Clear Choice billings in just a nine-month period.

“Thanks to PRN Funding, we had the cash flow we needed to bring in enough people to convert this very large client into a full service account, instead of just the overflow work we had been receiving. That was a huge growth for us. It also helped us bring on new clients, too,” Davis explains.

In the beginning Clear Choice had 25 medical transcriptionists in the U.S. and an offshore vendor. Today, they have 110 medical transcriptionists in the U.S. and about 150 on their offshore team. In a very short time frame, Clear Choice Medical Transcription had grown dramatically.

Value-Add: Peace of Mind
To Davis, knowing she has PRN Funding behind her gives her a secret weapon in the competition for new clients.

“It’s the security of having them there. If there’s a client we’re chasing after and their terms need to be extended to 45 or 60 days, knowing in the back of my mind that I have access to the cash flow immediately after invoicing gives me a very big bargaining chip with the prospect. It’s very helpful in bidding on new clients, to know that we can accommodate their needs without over-extending ourselves.”

As an ongoing PRN Funding client, Davis is excited about the future.

“In this industry, if you don’t have a huge bankroll in the beginning it’s very difficult to get started. We were lucky to find PRN Funding in the beginning, and I’m looking forward to continued growth,” Davis says.

Medical Staffing Invoice Factoring Case Study A Factoring Case Study

The allied health staffing factoring specialists at PRN Funding recently invited one of our previous respiratory therapist staffing clients to “spill the beans” in a tell-all interview about his experiences with using PRN Funding as a medical staffing factor . Although it’s posted on PRN Funding’s web site, we also included a copy of it on The Factoring Blog for all of our medical staffing agency owners to read:

The New “Old-time” Banker: Growing in a recession
When Greg Donnelly bought a small respiratory staffing company in 2006, he immediately set to work growing the business, focusing on providing excellent care and nurturing solid client relationships. First Select Medical Staffing gained a foothold in the market and began to grow, from five therapists to 51. What Donnelly didn’t count on was the deepening recession and resulting credit crunch. His relatively new fast-growing company needed funding for payroll: his first payroll in 2006 was $700, and by April of 2008 it was $40,000 every two weeks.

“Banks weren’t lending to small businesses, especially one that was a staffing company: they didn’t have a lot of experience with companies like mine,” Donnelly recalls.

A medical staffing lender who understands He started looking into funding options and found PRN Funding, LLC, a medical staffing factor, and Phil Cohen.

“I wanted someone who would understand my business and had a track record. Right off the bat his company name told me he understood the medical field. PRN is medical shorthand for patient administered treatments, on an as-needed basis. When we first met and I showed Phil my business plan with my respiratory niche, the increasing demand due to aging population and the seasonal capabilities of respiratory therapy, he totally understood it. He’s a very knowledgeable businessman and I was very impressed. PRN Funding was very responsive from the very beginning and they stayed right with me for any questions I had. I wasn’t just an entity, they made me feel like I was important to them.”

Phil Cohen, founder and President of PRN Funding, felt that even though First Select was non-bankable, they were a fit for PRN Funding. “First Select met all of our criteria very comfortably. They were a start-up company, selling to customers with very good credit. Unfortunately accounts were taking longer to pay than expected and First Select did not have the cash flow to meet its payroll.”

First Select had contracts with more than 100 hospitals and long-term acute care facilities with customers among some of the best in the nation, such as the Cleveland Clinic. Though his clients were stable, the recession affected their cash flow like all other businesses which resulted in their stretching payables to vendors like First Select Medical Staffing.

AR Funding to survive, thrive, monetize
Factoring was a very good option for First Select, allowing Donnelly to grow the business without worrying about having the cash flow to meet payroll and tax obligations. Additionally, it allowed First Select to grow revenue and, in doing so increase the value of the company. PRN Funding gave Donnelly the flexibility to factor invoices when he wanted, without being locked into a contract.

“What was nice about it was that I’d send in my invoices and funds were always available, whether the amount I needed went up or down. I didn’t have to worry that the cash would be there to meet payroll and other obligations. I could focus on growing my company. I don’t think I would have been as successful without it. Like anything else there’s a price to it, but I found the cost very reasonable in order to have that security blanket.”

Value-add: trusted business counselor
Beyond a medical staffing payroll funding solution, Donnelly found a business advisor in Cohen with whom he could discuss business challenges both operational and financial, and rely on for impartial and educated advice.

“Phil was a great sounding board for me and that’s incredibly valuable when you’re in business for yourself. We’d meet for lunch periodically and he’d give me advice if I asked for it. He’s a very experienced businessman and he’s willing to share his knowledge. He would play devil’s advocate and that helped me make decisions. He was interested in my company’s growth, but I didn’t feel it was because he wanted me to factor more invoices. He was an advocate for my company and its growth, and helped where he could, to survive in such a harsh economic environment.”

“I felt the same comfort level with his people; he had obviously instilled a high work ethic in his employees.  My primary representative was excellent. When he was away and I worked with another representative, it seemed as if they had been handling me from day one. I really think it’s the organization Phil built around him that makes PRN Funding stand out.”

Finding a buyer: an unusual role

By 2009, First Select was more than doubling in size each year and Donnelly was working 24/7. Other interests caused him to think about selling the business and he turned to Phil for advice.

“He was very sincere about giving me information so that I would maximize my return on investment. He gave me his opinion on the value of my business, the earnings multiple that was appropriate for similarly sized companies in the medical staffing industry, and how to negotiate an earn-out provision from the sale. I found his advice very helpful in negotiations with several strategic and financial buyers. And I thought that was very impressive given that whoever bought the company might not use his services. He wasn’t worried about keeping First Select as a client, he was trying to help me with advice like he always has.”

In an unusual twist, it was Phil who found the buyer for First Select. “At PRN Funding we have a philosophy that is different than most, we don’t treat clients like we are the end game. Factoring is by definition a bridge to get from point A to point B. When a client comes to us and says I’m ready to move on, I think I can go to a bank, we’ll make the introductions and help them package their business whether for a bank, for sale, or self funding. It’s like sending your kids off to college – it’s gratifying to see them grow, but you know you’ll miss them.”

“Phil was sincere about helping me, I still feel that to this day,” Donnelly says. He has since gone on to start another business venture and has no hesitation in calling on PRN Funding again if needed.

“I still stay in touch because he just feels like a good friend. With PRN Funding, I not only gained a funder, I gained a business colleague in Phil. Whenever we met, I’d leave feeling that we’d had a good conversation and he’d offered good advice. When I was younger, you could go to your local bank and they knew you and you called your banker by their first name. If you needed a loan you’d sit down and talk about it, you had a relationship. Guess what? With PRN Funding I found someplace I can do that again.”

Check out Greg Donnelly’s YouTube interview about how allied health staffing factoring worked for his company:

How Medical Facilities Can Establish Reality-Based Turnaround Times

“When it comes to establishing realistic turnaround-time (TATs), clearly defined expectations are crucial.” That’s the mantra of Elizabeth S. Roop’s article in the November 22 edition of For the Record Magazine. Her article discusses the importance for medical transcription service organizations (MTSOs) to achieve an appropriate balance between speed, quality and consistency with their TAT service-level agreements.

Ms. Roop points out a number of things for medical providers to consider when contracting with an outsourced medical transcription vendor, namely:

  1. High quality, ability to meet TATs and affordability are all pieces of the same triangle. Skimping on any of the three will affect the triangle’s properties. For example, if a hospital demands an MTSO have produce high quality and high speed records, then it must be willing to pay a high premium for those services.
  2. Be sure to take into account any unique medical facility characteristics (i.e. type of records, frequency, required skill levels,  etc.).
  3. Prepare and negotiate ahead of time to handle staffing fluctuations and possible overflow situations. Two scenarios where volume fluctuations are hard for MTSOs absorb are: (1) When a hospital chooses to outsource all of its medical transcription, leaving no in-house staff to pick up the slack; and (2) When a hospital uses an MTSO to supplement in-house overflow. (NOTE: Keep in mind, in either of these situations, an MTSOs cash flow can dramatically change. Receivables can take longer to come in even though the work levels are increasing. One way to counter this situation is to use a medical transcription factoring firm.)
  4. Busy clinicians can also alter turnaround times. It’s important for medical facilities to establish proactive relationships with their clinicians to help avoid nasty surprises and ensure that clinicians are aware of how the quality and timeliness of their dictation impacts the speed with which they receive reports.

In addition to the author’s suggestions, medical transcription industry experts suggest the following tips on how to manage TAT:

  1. Establish whether medical transcription work can be outsourced offshore and make any necessary accommodations to ensure TAT can be met if it will not be.
  2. Clearly define penalties for nonperformance  as well as any “cure” period during which service can be brought back up to par. Also consider specific rewards for outstanding performance.
  3. Conduct due diligence, including checking MTSO references with case mix and TATs similar to what will be expected.
  4. Select an MTSO appropriately sized for the expected demand and ensure it has the resources to handle fluctuations.

AHDI’s Vitals eNewsletter Changes to eBrief

Beginning in January 2011, AHDI and MTIA members will begin receiving a weekly eBrief publication instead of Vitals.

The new eBrief promises to deliver the same kinds of medical transcription and healthcare documentation industry news that Vitals did, including:

  • MT industry news and trends
  • Information on regulatory issues
  • Privacy and security updates
  • Mergers and acquisitions announcements
  • Emerging technology updates
  • Much more!

Keep in mind that those medical transcriptionists and MTSOs who are not members of MTIA or AHDI can also freely subscribe to the new eBrief.

AHDI Members Contact Info:
800-982-2182 or

MTIA Members Contact Info:
800-543-MTIA or

Healthcare Documentation – Plexus Announces Best of the Best

From mid-July to mid-August, AHDI released a survey to find out the best of the best in the healthcare documentation industry. The results were printed in the November 2010 issue of Plexus magazine. The medical transcription invoice funding specialists at PRN Funding took the liberty to summarize the findings below:

Best Word Expander Software or Tool:
Instant Text

Best Medical Dictionary:
Stedman’s Medical Dictionary

Best Drug Book or Pharmaceutical Reference:
Quick Look Drug Book

Best Overall Book or Printed Reference:
The Book of Style for Medical Transcription, 3rd Edition

Best Electronic Reference (CD or Web Service):

Best Clinical Medicine Website:

Best English Language Website:

Best Online Source for CECs:

Best Industry Newsletter:
Vitals n-Newsletter

Best Medical Transcription Community/Social Networking Website:

Best Provider of Medical Transcription Equipment:
Transcription Gear

Best Medical Transcription Employer:

Question: Do you agree/disagree with the survey results?