Use Accounts Receivable Factoring to Expand Your Business

October 3, 2016
How you can use factoring to expand your business?

Some times opportunities for growth come your way and you have a tough decision to make. Do you take the risk of investing now for the opportunity to generate greater revenues in the future?

Here are some real-world examples of how factoring allows you to make the most of growth opportunities that come your way.

Expanding Your Business with Factoring

A client, a successful anesthesia services company needed capital to expand their practice. They wanted to take advantage of a huge opportunity for growth, but also faced some challenges. In order to grab the opportunity, they needed to hire more doctors. The company was concerned about doing this in light of the unpredictable payment cycle of some insurance companies. The problem with hiring more doctors was it would take them some time to generate revenue. In the meantime, the anesthesia practice still had to cover their operating costs and payroll. They required a funding solution that would provide the cash flow they needed to bridge the gap of time between hiring new doctors and receiving the new insurance payments.

Once we analyzed the business, we saw that this situation was a great fit for accounts receivable factoring. We helped them coordinate a move to a bank familiar with the processes we needed in place to fund.  Then we worked through the intricacies of switching billing addresses on Medicare and third-party insurers. Ultimately, we were able to fund the expansion and they were able to seize a tremendous opportunity to grow their revenues.

Expanding into New Territory with Factoring

Here is another example of how factoring helps you expand, but this time we are talking about launching into new geographical areas. One client we worked with recognized an opportunity to move into a new state. They were already operating in three states and adding the fourth state would increase their revenue dramatically.

This company provided service to both hospitals and patients by handling all the intake processes and paperwork associated with getting uninsured people coverage through government programs like Medi-Cal and SSDI. They had a profitable business model in place and it was obvious expanding to the new state was a smart move to generate more revenue for the company.

We used accounts receivable factoring to pay-off a bank loan and to fund the new operations in the fourth state. The bottom line: factoring allowed them to expand their operation and revenue.

Here's what I hope you takeaway from these examples. Opportunities for growth are out there and you might be passing them up because it requires an extra investment of capital. You have to hire new workers or ramp up operations in a new region or state. You don't have to let these acquisitions slip by if you know how to use factoring to fund the deals.


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