Often, these programs have included loans against the credit card, or merchant receivables of a practice. However, there are many practices that generate significant Gross Revenues, but little, or very little of it is through Visa and Mastercard sales. Surgeons in particular generate less than the average percentage of their sales and income by accepting credit cards. The percentage a patient may pay often will come out of pocket.
Many practices may employ financing based on Gross Sales. For many Medical Practices, this may still be traditional financing based on their field, profession and significant annual Gross Revenues. Banks and other traditional funding institutions still hold Medical professionals in higher regard than regular business customers with the same revenues, time in business, credit and similar net worth.
The reason for this is that Medical professional have one of the lowest default rates of individuals or businesses.
Another reason is that they are specialty licensed. Their skills are very specialized in many cases, and in demand. Finally, Medical practices go out of business at a far lower rate then businesses in general. This is perhaps the biggest reason banks and other traditional financing sources have long sought out Medical professionals.
Many banks and other traditional funding sources have special departments whose sole purpose is to call on, solicit and close business with Medical professionals . Many banks have departments known as professional banking which they have for this purpose.
Many Medical professionals end up obtaining financing based on Gross sales through these traditional sources. However, there are a significant number that do not and pursue other forms of financing with other institutions through their Gross Revenues.
