What Sets PRN Funding Apart from Other Healthcare Factoring Firms?

How does PRN Funding’s healthcare factoring services differ from other factoring firms’ services?

In a nutshell, PRN Funding is known as the healthcare factoring experts. Temporary nurse staffing agencies, medical transcription services, medical coding services, and medical supply companies are just a few examples of healthcare businesses that we specialize in account receivable funding.

  1. PRN Funding works exclusively within the healthcare industry. If you sell products or deliver services to healthcare facilities, there is nobody better than us.
  2. Ultimate in factoring flexibility – You choose when, who, how much and how long to factor your invoices.
  3. Cash advances on your qualified receivables within hours of verification.
  4. No fixed-term contract to sign; you can stop or start factoring at any time.
  5. Collections are performed in a professional and productive manner, allowing your staff to focus on higher value-added activities.
  6. Real-time access to our online accounting and reporting system 24/7/365.
  7. No automated attendant-When the phone rings during business hours, a person answers.
  8. Access to a personal account manager. Accounts are assigned to one specific person who knows your business and your customers inside and out.

Don’t take our word for it! Read healthcare factoring success stories from some of our happy customers!

Common Customer Reactions to Factoring

If I use a factor to fund my invoices, what will my customers think?

This is a concern of many companies who are considering factoring as a finance strategy. However, establishing a credit line is a positive statement–not a negative statement–to make to your customers. Not all healthcare companies qualify for lines of credit.

Selling accounts receivable to generate cash is a finance method used by very large corporations worldwide, with the factoring service provided by the largest banks in the nation. In the past, only large corporations with millions of dollars in receivables per month qualified for factoring. Often factoring companies refused to work with smaller companies or companies with a large number of small invoices. Because factoring is widely known, your customers will view this as a positive ability on your part to secure financing, not as a problem with cash flow.

It’s likely that many of the healthcare institutions that you service already deal with factoring companies and may not even be aware of it. Sometimes payments for invoices directed to a P.O. Box are actually going to a factor. Shell Oil, Georgia-Pacific, IBM and other substantial companies factor millions of dollars of their accounts receivable every year.

Financing obtained through the sale of accounts receivable factoring is most often used by a firm to expand and take on larger projects; not merely for cash flow or payroll. Now that this service is available to companies like yours, you can enjoy both the perception and the reality of being a growing company, moving forward.

Still worried about how your customers will react to a factoring company? View PRN Funding’s What to Tell Your Customers page to learn how to talk to your customers about factoring.

How Medical Billing Companies Can Avoid the Double Credit Crunch

In this economy, many service-oriented small businesses are struggling to obtain cash on two fronts – (1) Acquiring or extending a line of credit and (2) Getting their customers to pay in a timely manner.

Outsourced medical billing providers are just one type of business that is being affected by the “double credit crunch.” On the one hand, banks have tightened up on their lending criteria, and most are slashing credit lines instead of extending them, which means the likelihood of a medical billing provider securing bank funding is slim-to-none. On the other hand, even though an outsourced company’s main job is to bill insurance companies correctly so physicians (their customers) get paid quicker, those same physicians are oftentimes notorious for stretching out their payables.

Fortunately, there is an alternative financing option that can help speed up the payables process.

Medical billing accounts receivable factoring is the conversion of receivables into cash by selling outstanding invoices to a factor. A viable option for medical billing companies in the early stages of business development and /or during rapid growth, accounts receivable factoring is a financial solution that gives medical billers immediate cash to manage operations more efficiently. Here are some additional key concepts about this practical financing alternative.

Medical Billing Accounts Receivable Factoring is:

  • A way to fill the gap between when your company provides outsourced billing services and when the physicians pay. Simply put, medical billing invoice factoring can turn weeks into hours or days.
  • Based on your customers’ credit history, not yours. If your company is providing billing services to a creditworthy physician’s office or medical facility, then your business is a good candidate for accounts receivable factoring.
  • A simple, fast method to sustain your “business as usual” relationship with your customers. Your company can continue to provide medical billing services to your customers with a set-term payment; but with accounts receivable factoring, you no longer have to wait to be paid. By working with a factoring firm, your company can easily obtain cash advances of 80% of the invoiced amount. Cash can be obtained within hours and as often as needed.
  • One of the oldest methods of providing working capital. Dating back 4,000 years, receivables factoring has long been used as a feasible and easy way for businesses to obtain cash flow in order to cover expenses while experiencing growth.
  • A chance to obtain cash without providing personal collateral or increasing interest expense. Invoice factoring is not a loan and does not “muddy up” your medical billing company’s balance sheet. You do not accrue interest or penalties. The medical billing factoring fee is clear and objective; it is based on the size of the invoice, the length of time it takes to collect the payment, and the creditworthiness of your customers.
  • An opportunity to build your outsourced medical billing company’s credit: With adequate cash flow, you can use money from accounts receivable factoring to clean up your debts as well as pay overhead, salaries and invoices. This will improve your credit history and make it easier to obtain credit from vendors and other financial institutions in the future.

By working with an accounts receivable factoring company, your company’s cash flow problems can be solved. In most cases, a medical billing company can receive the majority of what’s owed to them within hours of selling their invoices to a factor. Factoring for your medical billing company will help you avoid falling prey to today’s “double credit crunch” that so many other small businesses are enduring as a result of the current economic climate.

**NOTE: This article is a re-printed version of what was also published on FactoringInvestor.com.

How Groupon Makes Factoring Invoices Look Cheap

Tracy Z wrote an interesting post on FactoringInvestor.com comparing and contrasting the cost Groupon vs. the cost of invoice factoring.

Rightfully so, Tracy defined the marketing lure of Groupon as “marketing with no upfront fees.” For cash-strapped business owners looking to make more sales, free advertising sounds like a good deal–That is until you break down the numbers:

  • 50% discount to customer
  • 25% fee to deal provider
  • 25% net to business owner

In essence, the business owner only makes 25% AND they have to wait to get their portion, in installments, over time.Tracy outline a simple example, where 1/3 of the business owner’s profits was paid in 5 days, 1/3 in 30 days and the balance within 60 days:

$100,000

-$50,000 discount

-$25,000 fees

=$25,000 received by business owner (33% or $8,333 immediate advance, with the remaining $16,667 paid out over 60 days.)

Then Tracy used the same scenario as though the business owner were factoring:

$100,000

-$5000 factoring fee (average 5%)

=$95,000 received by business owner (80% advance or $ 80,000 upfront, with the balance less the fees received once debtor pays in full).

Pretty interesting comparison, huh?

Click here to read the article Tracy referenced in her post: Why Groupon is Poised for Collapse.

Summer Factoring Broker Promotion Begins

PRN Funding, LLC is running a special summer factoring broker promotion, and we wanted to spread the word to the factoring brokers and cash flow consultants who read The Factoring Blog.

Here are the details of the promotion:

Refer a new medical staffing prospect, get a $50 gift card of your choice!

You Get Paid Even if We Don’t Close the Deal!

AND

The person who refers the most medical staffing leads will win an iPad!

NOTE: Brokers must submit a minimum of three leads to qualify to win the iPad.

iPad

Contact Nikki Flores when you have a qualified prospect*, and we’ll do the rest!

nflores@prnfunding.com

866-776-5407

Choose from the following gift cards:

Amazon Olive Garden
AMC Movie Theaters Red Lobster
Applebees PF Changs
Best Buy Sears
iTunes PF Changs
Golfsmith Starbucks
Kohls Ticketmaster
Nike

Act now! This promo ends September 30th!

*Upon evaluation and approval that the following criteria have been met for a referral, PRN Funding will mail out a $50 gift card (of the broker’s choosing) directly to the referral source:

  1. The prospect must be an organized entity (Corporation, LLC). Sole proprietorships, general partnerships and DBA’s do not qualify for this promotion.
  2. Broker/cash flow consultant must, at minimum, informally introduce PRN Funding, LLC to the prospect. In other words, PRN Funding will not make any cold calls as part of this promotion.
  3. The prospect must have a legitimate need and interest in accounts receivable factoring.
  4. PRN Funding must receive a completed application and accounts receivable aging report from the prospect.

Factors Stay Busy Due to Credit Squeeze

A small business owner who is trying to grow his/her business during a booming economy will hit some speed bumps when applying for traditional financing if he/she cannot show an extensive profitable operating history. Throw in the current economic climate, and the chance of an entrepreneur obtaining a conventional bank loan is slim to none.

When loans are no longer an option, business owners have to find a short-term funding option to keep them from dipping into their personal savings accounts or having to rely on friends and family for operating cash. Over the past decade, the main fallback has been small business credit cards. During better times, credit card companies actively pursued the small business market. Entrepreneurs were enticed with low introductory interest rates and high credit limits. In addition, banks started offering small credit lines to entrepreneurs who didn’t meet conventional loan requirements, and vendors started relying on the efficiency of credit card payments. Needless to say, the small business credit card caught on like rapid fire. Today, nearly 60% of the nation’s small businesses rely on credit cards to help fund their daily operations, according to the National Small Business Association.

Yet as the economy worsens, entrepreneurs are seeing their interest rates going up and their credit limits going down. With credit card delinquency as high as 12 percent among small business owners, bankers and credit card companies say the only way to decrease the risk in their portfolios is to make some changes with their small business accounts. As a result, nearly three-quarters of small businesses have seen a large cut in their credit limits over the last six months. Now that access to both bank loans and credit cards is hard to come by, where can the nation’s 27 million small business owners turn for funding?

Enter factoring. Now more than ever, entrepreneurs across the nation are in desperate need of a factoring firm that understands the intricacies of today’s funding marketplace.

If you think about it, the process of factoring receivables is very similar to using a credit card. For example, many small business owners use a credit card to purchase additional inventory and then pay down that bill as their customers pay them. With factoring, a business owner could just as easily sell his/her invoices to an invoice factoring firm and receive cash immediately on those invoices. In turn, they can use the cash to purchase additional inventory. In both instances, the business owner has readily available cash to purchase more supplies. In fact, the two funding mechanisms sound almost exactly the same.

However, there is one very important difference. When credit card companies and banks define a credit line and interest rate for a small business credit card, it’s based on the financial strength of the small business or its owner. During an economic recession, credit card companies view the normal ups and downs of a struggling small business as too risky. However, with factoring, the credit decision is not based on the business’ credit at all. Rather, the lending decision is based on the creditworthiness of the company’s customers. Keep in mind that small businesses routinely sell to larger, more established companies. Because these companies are financially sound, they have the ability to continue paying their vendors, even during an economic decline. So in other words, when business owners use factoring, they can literally leverage the creditworthiness of their customers, which leads to lower fees and higher credit limits.

Now as I previously stated, there are 27 million small business owners in America right now who could be looking for another form of invoice funding because of the current state of the economy. Factoring is the perfect funding solution for those entrepreneurs who are unable to qualify for a traditional line of credit or are having difficulty negotiating reasonable rates on a small business credit card.

Tips to Help Small Business Owners with Slow Paying Customers

Did anyone happen to see the article in Costco’s publication that discussed factoring as an alternative financing route for small business owners? If not, you’re in luck, as the invoice funding experts at The Factoring Blog has decided to share parts of the article that we thought would be interesting for our factoring blog readers.

The article, Tips for Dealing with Slow Paying Customers, first explained how larger corporations are basically informing their smaller vendors that they will be paying their bills late. This kind of situation is forcing small business owners to provide free loans to larger companies, which inhibits their own growth.

The article then discusses a couple of ways that small business owners can respond to the unfortunate circumstances.

John Barrickman, a Costco member and president of New Horizons Financial Group, suggested for small business owners to look into their uncollected receivables, and beef up their collections efforts. He also encouraged small business owners to start utilizing some banking features to help them collect quicker, such as lockboxes, remote payments and electronic processing. He also said that when one or two of a small company’s customers slow down their payments, it’s time to really focus a lot of energy on getting the rest of its customers to pay promptly.

Lisa Aldisert, another Costco member and president of Pharoas Alliance, Inc., suggests for entrepreneurs to take another look at their payables procedures. Aldisert said, “Stretch your payables as long as possible without hurting your vendors, unless you’re offered a discount for prompt payment…[just] don’t be late; you want to maintain excellent trade credit.”

Finally, Tracy Eden (Costco member and president of the Commercial Finance Group) suggested for these struggling small businesses to consider accounts receivable factoring as a way to improve their cash flow. A business owner can sells its receivables to a factor at a discounted rate to receive cash upfront instead of waiting months to be paid by their customers. Factoring firms typically advance between 70-90 percent of the invoice up front. When the factor receives payment on the invoices it purchased, it give the difference between the advance and its fees back to the business owner. It’s a great way for small companies to improve their cash flow and maintain good vendor relationships.

Ways to Market Your Medical Billing Service

Mother and daughter, Alice Scott and Michele Redmond, wrote an excellent article in Issue 6.4 of BC Advantage. The duo are coauthors of 11 books on medical billing and medical credentialing and co-owners of Solutions Medical Billing Inc. The medical billing invoice funding experts at PRN Funding thought the information within the article would be quite beneficial to our medical billing business owner readers. Written below is a brief summary of the article, which appeared on pages 20-21 of the medical billing and coding magazine.

The ladies emphasized the fact that those medical billing company owners who are serious about making it in the business “learn to market effectively and quickly.” They go on to say that there are a number of different ways to market a medical billing service, and that the key to being successful is developing a marketing plan, and then sticking to it.

Utilizing referrals is a great way to get started. However, many business owners assume that referrals can only come from clients. So what do you do if your medical billing service is new, and you don’t have any clients yet? Remember that referrals can come from sources other than clients. Alice and Michele suggest asking yourself this question when looking for good referral sources: “Who do you know that is aware of your abilities and strong points?”

For example, you could reach out to doctors you worked for in the past and ask them to write a referral for you medical billing company, or check in with a teacher you remember from when you took medical billing classes, etc., etc.

Finally, the medical billing industry authors suggested that business owners “get someone to offer some inside information that gives you a little leverage in getting in to see a doctor about your service.” Tell your general practitioner about your medical billing business. Even if he/she cannot use your medical billing services, perhaps they could refer someone else who can.

The women concluded the article by reminding medical billing entrepreneurs that word-of-mouth marketing can only take your business so far, and that sooner or later, you will have to spend money to make a real marketing impression.

For medical billing companies who are just getting started, it might be hard for them to acquire the cash needed to implement a strong marketing program. Enter medical billing accounts receivable factoring. Startup medical billing companies can sell their invoices to a medical billing factor, and get cash upfront to cover those marketing costs. Visit PRN Funding’s medical billing factoring page to learn more about this financing alternative.

Medical Transcription Invoice Factoring Case Study

NOTE: This medical transcription factoring case study can also be found on PRN Funding’s web site.

Established, But Wanting to Grow…
Paula’s medical transcription business was five years old and was doing well. Her medical transcription service provided transcription on a regular basis for a number of community hospitals, clinics and physician offices. Things were running smoothly, but Paula was not satisfied. She really wanted to see her medical transcription service grow. She had a number of ideas on how she could expand her business and she knew of some definite growth opportunities in the healthcare industry. Her first plan was to attend a trade show for health information managers that would hopefully land her some new and bigger clients.

Medical Transcription In Demand…
The trade show turned out to be a huge success. Paula had a list of hospitals that were in need of a reliable and professional medical transcription service. Paula was eager to begin servicing these new large clients, but in order to meet the demands of these hospitals her business would need a major overhaul. She would have to increase the size of the dictation system, have interfaces built and recruit and train new transcriptionists. She was going to incur large start-up costs in order to prepare for the new clients, and she was also going to see a tremendous increase in her on-going expenses, especially payroll. In the meantime, it would be many weeks before any of the new clients would pay for her company’s medical transcription services.

Supplying the Demand…
Paula wondered how she would get the money that she needed in order to accommodate the new clients and expand her medical transcription business. She first asked her bank for the working capital that she needed, but she could not meet their requirements. The bank instead recommended that she call a medical transcription accounts receivable factor to provide her with the instant cash relief that she needed. Paula searched the Internet and found PRN Funding, LLC, an accounts receivable factoring company that specializes in funding businesses in the medical transcription industry. PRN Funding looked like a perfect match for Paula’s medical transcription business and she was hoping that they would have the solution for her cash flow problems.

Extend Financing to a Growing Business Without a Loan…
Paula immediately completed an online factoring application and electronically submitted it to PRN Funding via the Internet. She received a phone call later that same day from one of PRN Funding’s account specialists, who walked her through the factoring process. She learned how factoring her medical transcription accounts receivable would provide her with the working capital she needed to expand her medical transcription service.

Factoring Helps an Established Business Grow…
Paula was thrilled to learn that she could factor as few as one or as many as all of her clients and that there were no minimum amounts to factor. With no binding term contracts, she could factor as long as she needed without having to commit to a specific length of time. All she had to do was invoice her clients as usual and then submit the invoices to PRN Funding. PRN Funding would verify and purchase the invoices and provide Paula’s business with a cash advance within hours. PRN Funding provided the answer that Paula needed to expand her medical transcription business and to service the new clients. By factoring her medical transcription invoices, Paula was able to grow her MT business to a whole new level.

Would you like to learn more about how PRN Funding can help your medical transcription service? Apply for medical transcription factoring now!

Temporary Nurse Staffing Factoring Case Study

NOTE: This temporary nurse staffing factoring case study can also be found on PRN Funding’s web site.

An Opportunity for Acquisition…
Barry was the office manager of a temporary nurse staffing company for many years when he was approached with a great business opportunity. The owners of the business were ready to retire and offered to sell their medical staffing company to him. The owners wanted to see their business continued, so they hoped that Barry would agree to buy the business and take over the ownership duties. If not, they would have to look to sell to an outsider running the risk of losing what made the agency unique. They felt that Barry was the best fit for managing the business. He would ensure the on-going success of their temporary nurse staffing company. The owners were even willing to work out a purchase plan with Barry so that he could make payments over time rather than all at once, but he would still need to make a significant down payment in order to secure ownership of the nurse staffing business.

Collateral Needed for Investment…
This opportunity was extremely exciting for Barry and he felt that it would be a great career move. He knew the ins-and-outs of the nurse staffing industry and was confident that he would continue to operate profitably. In a few years, with aggressive sales to area hospitals and nursing homes, he would be able to increase profits for the nurse staffing business. Barry only had one concern. He had no idea where he was going to get the money he needed for the down payment. Temporary staffing organizations simply don’t have the type of hard assets banks require as collateral. Also, the sellers were willing to take a note financing most of the business, but in return they would not allow any senior debt on the balance sheet. If he absolutely had to, Barry could guarantee the loan personally, but that was his absolute last option. There had to be another alternative for Barry to secure the working capital that he needed.

Cash Available in the Outstanding Receivables…
Looking over the financials, Barry realized that there was a significant amount of accounts receivable outstanding. The owners had not been aggressive in collecting or managing their accounts receivable. The services had already been provided, the employees had been paid, but the invoices were still outstanding. Barry remembered seeing an advertisement in one of his staffing journals for PRN Funding, LLC, a temporary nurse staffing accounts receivable factoring company that turned receivables into cash immediately. Promptly, he called PRN Funding and spoke to an account specialist for his business cash flow solution.

A Successful Nursing Staffing Company…
Just as the owners of the nurse staffing company were preparing to sell him the business, Barry was able to establish a relationship with PRN Funding. PRN Funding bought the outstanding invoices, even the invoices that had been issued months ago, and provided the temporary staffing business with an immediate cash advance. Barry used the funds from the cash advance to make the down payment on the business. PRN Funding was also able to actively and professionally collect on the outstanding accounts receivable, freeing up more time for Barry to concentrate on operating his business and ensuring the continued success of his nurse staffing company.

Would you like to learn more about how PRN Funding can help your healthcare business? Apply for healthcare factoring now!

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