Medical Practices: Using Asset Based Lending For Working Capital

January 26, 2017 by CNH Finance, LP in category “Financing”

Medical practices have to maintain a careful balance between receivables and expenditures to retain the necessary capital for operations and growth. Many medical practices, from independent specialists up to hospitals and healthcare centers, are shifting their attention to asset based lending to create an additional source of working capital without taking on unnecessary debt.

What Is Asset Based Lending For Medical Practices?

Medical practices use asset based lending to create a revolving line of credit around those items owned by the organization. Property, vehicles, inventory, equipment, and receivables can all be used to structure a line of credit which medical practices can use as needed, without having to assume debt or deal with the other caveats and covenants that come with traditional bank loans.

Getting The Most For What You Have

When traditional lenders offer financing programs to medical practices, they frequently overlook many assets which could be used to generate value. Asset based lending leaves no stone unturned. Any assets of value which can increase the amount of working capital for medical practices will be used. What many traditional lenders, with their “one size fist all” approach to financing, will dismiss out of hand, asset based lending will analyze to increase spending limits and purchasing power.

No Debt

Asset based lending allows medical practices to preserve and build their credit ratings by offering aline of credit. Practices do not have to take on any debt, or worry about cost-prohibitive payment schedules for years after the money has run out. Asset based lending is a revolving line of credit. This means as practices access funding, it can be replenished, much like any other business line of credit. Practices can use the line of credit and actually build their credit ratings, as opposed to having them lowered with loan debt.

Growth For Medical Practices

As practices grow and improve their assets, so will the structure of asset based lending. As a practice purchases new equipment, merges with or acquires other practices, and other assets, the line of credit will grow to reflect and promote that growth.

Get The Asset Based Financing You Need

If you own a medical practice and would like an additional source of working capital, contact CNH Finance. We specialize in asset based lending solutions for the medical field.

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