With science advancing at such a rampant pace, the need for direct capital to pursue medical practices is greater than ever. The capital can be used for buying equipment or supplies. Merchant Cash Advance (MCA) has now become a viable option for medical businesses which have proved to be a better alternative for conventional financing.
When you are in the medical practice business, it is important to purchase new medical technologies that help you expand patient care options. However, some businesses are unable to afford to acquire a new piece of medical technology on the basis of their existing cash flow. Initially, people who used to seek medical finance considered small business loans as a great option. But, there are a few disadvantages associated with it that makes the option less attractive for medical practitioners.
When healthcare and medical businesses face difficulties to arrange funds, there is Merchant Cash Advance (MCAs) to assist them!
Some industries and businesses experience more issues when they have to find a source of funds to expand. There are many options for a business owner to gather capital if you are a big business, but startups and small and medium businesses might always have some difficulty to bear.
This way, getting a loan for such businesses or industries is not as easy as for others – and conventional channels such as small business loan providers consider them as high risk. However, the scenario has changed with MCAs for medical finance. Healthcare is known as one of the most volatile industries. Thus, people who needed financing for their medical practice could not find a good source of funds. For many years, medical businesses had issues with their cash flow. Therefore, if someone needs funding to set up a hospital, private clinic, or buy equipment – it will not be easy to get a conventional loan.
Let’s discuss the factors that caused constricted cash flows, making things difficult to get medical finance:
They have a huge team to handle
This is true! When individual plans to open a private clinic, they require a huge team of doctors, nurses, and medical experts. Whether the clinic is small or big, the running costs to provide topnotch services are quite high. The initial capital to set up a clinic is for the office space and the salaries of the employees.
The need of having a diagnostic center
When we talk about the diagnostic center, we mean high-end establishments. You would need larger funds. However, this is subjective to the level of diagnosis you are going to offer. Either way, you will have to invest a huge amount of money on different medical equipment such as x-ray, test labs, and more – and with time, you might have to upgrade the equipment to keep up with the medical technology. Thus, this requires easier and quicker access to funds.
Medical finance for home-based treatment providers
Many medical businesses offer health care equipment and solutions to people for home based treatments. These may include oxygen equipment, hospital beds, wheelchairs and more, which are used by patients who are given medical care at home. The businesses deliver this equipment to them, particularly those whose fees are paid by either the patient directly or hospitals. In case it is paid by hospitals, the business would wait for the customers’ payments despite there being a slower cash flow. However, this should not affect their inventory as they might need equipment to provide whenever there is a demand.
They require establishment of rehabilitation centers
If you are looking to open a therapy clinic or rehabilitation center, you would not only need an office space but a space to accommodate recovery sessions of your clients. If you have a limited budget, it might not be possible to do it properly.
Regular need to upgrade healthcare equipment
Technology is affecting almost all businesses and industries. Likewise, the medical industry also has to adopt the rapid technological evolution. This is the primary reason why obsolescence is common for most businesses. There comes a time when you have to upgrade the setup to meet medical standards or expand operations.
WHY MERCHANT CASH ADVANCE FOR MEDICAL FINANCE?
As a medical business owner, when you prefer MCAs over conventional bank loans, you get access to working capital easily and quickly. What’s important to understand is Merchant Cash Advance is not a ‘type’ of a loan, rather it is the sale and purchase of credit card sales. This means that medical businesses are provided with fast cash as they sell a certain percentage of future credit card sales. In addition, the process will stop when you have fulfilled the repayments.
Using the finances, you can easily expand your operations, modernize your space and processes, upgrade equipment, and manage the day to day expenses.
SIGNIFICANCE OF MCAs IN HEALTHCARE INDUSTRY
MCAs are the right option for those businesses which accept upfront credit card payment from a majority of their clients. Merchant Cash Advance eliminates the need to wait for days and weeks to get an approval of the loan. You do not have to go through a cumbersome process and fill in an application form; instead, MCA is the faster and the modern way to get the money that you require. Even if you do not have great credit, you can reap benefits of having extra medical finance. The only drawback is that you might be expected to pay slightly higher fees than conventional loan options.
Most of the medical businesses experience a situation where they are left with non-sufficient funds. This is because they are waiting for the customers’ and other miscellaneous payments. When a business goes through high NSF situation, getting a bank loan is not easy. This is where MCAs are really helpful!
In majority cases, MCA providers facilitate high-risk industries and businesses, despite the credit score. The process to get quick money is easier and less time consuming because of shorter processing time as compared to traditional bank loans. Moreover, the application approval rate is also higher, and there is no upper limit on the amount that you can receive. Therefore, the biggest advantage of MCA is that it offers flexibility to cover medical finance required to expand and upgrade your healthcare solutions.
Apart from this, MCA providers are also easier to work with when you need fast cash. This makes it a more viable option for those who seek finance for their medical practices. Why? Merchant Cash Advance does not only cover corresponding overheads but the maintenance costs as well.
BENEFITS OF MERCHANT CASH ADVANCE FOR MEDICAL BUSINESSES
The benefits of MCAs for healthcare businesses are as follows:
Bolster day to day operations
It is important to take advantage of every opportunity that comes your way if you are looking to grow and expand your medical practice. There is a need to hire medical experts, doctors, and nurses along with acquiring best devices and equipment. You also have to promote and market your business to reach your prospective customers. Even though if you have capital, you may require an extra infusion of cash to keep day to day operations steady. With MCA, you will get access to money quickly and efficiently.
The primary goal is to grow and expand your medical practice. When you have those things in mind, you need to think about hiring more people, acquiring more equipment, modernizing space, and more. To make it happen, a significant investment is required, which can be provided by MCA providers in the form of medical finance.
When you get the money you need quickly, you can use a small chunk of that money to reduce debt whether it is for a line of credit, business credit cards, or short-term loans to kickstart your business. Do not let the debt build up as it will negatively impact your practice credit score. Debts also divert incoming cash and slow down the business cash flow.
Businesses consider working capital as a survival tool. In some instances, you lose control over things, for example; it is not much you can do when your facility suffers some type of disaster. You would need immediate money to overcome such things, as it has badly affected your cash flow. MCA can provide sufficient funds for disaster recovery and management to help you through your tough times. What’s more amazing than getting the money you want, instantly?
Despite the productivity level of your medical business, there comes a time when you need an extra infusion of money. Conventional bank loans are a good option, but only for certain investments. Alternative business financing options such as MCAs for medical finance are viable courses of action for the healthcare professionals. You will get all the flexibility and support you need. It is recommended to understand the need for extra cash and how it will benefit your business. This way, you can make an informed decision to invest the money in key areas of your medical practice.