BusinessWeek.com recently published an article that put JPMorgan Chase bank in the spotlight, as the bank started reducing or eliminating credit lines for a large number of small business owners to help even out its balance sheets.
According to the article, in most cases, “If business owners can’t convince Chase of their creditworthiness, they have three options: 1) pay off the balance in full; 2) agree to a conversion of the line of credit into a term loan; or 3) go into default.”
One business owner interviewed for the article described how his four lines of credit were reduced to two on the exact same day that he received a letter from Chase that the bank was blocking him from drawing on two lines of credit due to “an adverse change in his ‘financial condition and/or credit history.'” The entrepreneur had been drawing on all four of the lines to help meet his monthly payroll, and he’s not sure where the money will come from if he’s not able to reistate the two lines.
As banks continue to reduce and eliminate credit lines, there will continue to be an influx of established healthcare business owners who are in this same situation. Lucky for them, there is an immediate answer to their cash flow problems.
Home care agencies who need additional funding to pay their sitters and companions, medical transcription service owners who are waiting a long time for hospitals to pay, and medical coding companies who are looking to expand can and should take advantage of healthcare accounts receivable factoring programs to help them at a time when more traditional funding avenues are failing them.
Click here to read the entire article: Snipping Credit Lines for Small Businesses.