For the eye doctor in Texas, he could not factor his receivables because
his volumes were too how, and he did not want to factor his credit card
receivables to get a small business loan because it has to be repaid in
four to twelve months. The term on the hard asset based product
was up to 60 months so he wanted to proceed on this option.
In the interim, he indicated there wasn't much he could do about the
reimbursement rates, other than raise his own rates. He has no choice
but to do this, otherwise he can't get needed revenues out of his practice.
Health insurance companies are aware this is one of the reasons physicians
are raising rates and physicians frequently indicate that they have to spend
more on administrative staff to handle the phone work with the insurance
companies that sometimes challenge the billing.
great topic.
ReplyDeletemy uncle is a physician and his reimbursement rates went down. you would think being a physician he wouldn't have any problems in regards to loans but i know he's been looking
for a small business loan and had trouble finding one.
i know banks that banks aren't lending money right now even with decent credit scores. based on what my uncle was saying he possibly may have to give up if he can't find access to physician capital for his practice.
I'm sorry to hear he has been having this difficulty. Physicians have overall been having much more securing a small business loan than 10 or 20 years ago.
ReplyDeleteIf his patient billing receivables are high enough, there is a possibility there. The minimum amount accepted to factor patient receivables has gone up from roughly $25K
to $150K and in many cases $250K or higher.
That would disqualify a high percentage of practices from qualifying.
Another more recent option is a loan against
his hard assets, or equipment.
A further option, not as desirable, if funding
against his credit card receivables, though this has some downsides, such as a short term repayment and high daily repayment