Working Capital for the Medical Industry

Finding the right working capital can be a difficult task for most businesses, but in the medical industry it can be more critical. You need to have the funding on hand to pay for supplies and salaries even when it takes insurance companies and patients up to ninety days to pay their bills. To find the right capital source you will want to compare your needs to the available options.

Bank Loans

Traditional bank loans can be difficult to secure and take a long time for the application and approval process. In some cases, these are the best loans to go after, but they are not usually ideal for ongoing working capital. For instance, if you are looking to start your own practice, then a bank loan can help you get the funding you need to open your doors.

Secured and Unsecured Lines of Credit

Lines of credit can either be secured or unsecured, meaning that you may or may not have to have collateral on the line of credit. These lines can also be revolving or fixed, meaning that you may be able to pay off the line and reuse it when needed. An example of an unsecured and revolving credit line is a business credit card.

SBA Lines of Credit and Working Capital

The Small Business Administration can offer lines of credit and working capital to companies in the medical industry which fit the other criteria necessary. This can help you get your own practice up and running or keep your small business going through growing phases.

Asset Based Working Capital

Some of your assets can help you get working capital through both traditional and non-traditional lenders. You can get a mortgage loan with your commercial real estate as collateral or find companies which use medical equipment to secure loans.


Factoring, or accounts receivable, is the process of using your outstanding, but not late, invoices to get an advance. Depending on the type of factoring you do, this may mean selling the invoices to the factor and having them take over collections or it may mean paying back the advance and a small fee after the insurance company and patient has paid you. Either way, this is a quick way to get working capital for a relatively small fee and no interest payments.

Getting working capital in the medical industry can be particularly tricky because of the time your unpaid invoices take to go through insurance companies. There are ways you can get working capital through loans and lines of credit as well as factoring to help you pay your regular bills as well as grow your practice.


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