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Working Capital for Healthcare Funding

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Why MAR Funding

applesoranges2There are two types of accounts receivable financing utilized by the healthcare industry:

- Using your medical receivables [and other assets] as collateral to borrow money from banks or other asset-based lenders [ABL financing companies]

- Selling your medical receivables to Sun Capital HealthCare Inc. [SCH], a specialized MAR [medical accounts receivable] funding source, who purchases your medical A/R without encumbering your other assets.

 

BORROWING VS. SCH's MAR FUNDING

Borrowing money from banks or ABL lenders:

 

  • Adds debt to your balance sheet
  • Ties up other assets
  • Interest rates can vary since they are dependent
    on the credit market
  • Hidden fees
  • Personal guarantees often required
  • Lengthy application process, delaying the needed
    cash infusion
  • Credit limits and funding caps
  • Restrictive terms
  • Insufficient credit lines due to the often "under-valued"
    valuation of assets, especially your A/R
  • A loan repayment schedule which reduces the cash
    available to use as working capital

SCH's MAR FUNDING PROGRAM:

  • Debt-free working capital
  • Improved cash flow
  • Cash infusion within 24-48 hours of claim
    submission to SCH
  • Cost of funding does not vary with changing
    interest rates
  • Availability of funding grows with patient volume
    without re-applying for additional financing
  • Unrestricted use of funds to best meet your
    financial and business needs
  • Increased financial flexibility to use with other
    financial tools since your assets are not used
    as collateral for a loan
  • A healthier balance sheet which can reduce
    the costs of borrowing while maintaining
    debt capacity


Healthcare organizations can reduce their dependency on borrowing as their sole form of financing by utilizing SCH's MAR Funding program. It can be customized to effectively work with your other financial tools to meet your fiscal requirements, whether they are short-term cash flow needs or long-term capital programs or whether you are in growth mode or fiscal stress. Since SCH's program provides a predictable and steady cash stream, not dependent on lagging reimbursements, your financial plans can be more effective in generating sufficient working capital that is less subject to the strains of fluctuating revenue cycles.

Healthcare executives - with the endorsement of their financial advisors - have found that by using SCH's MAR funding program, their medical receivables can be a productive asset rather than a cash flow obstacle to growth and profitability.