As any small business owner and their lender will attest, cash flow and revenue disruptions are an ongoing cause of owner/lender anxiety. The availability of quick access to working cash for such contingencies is paramount to a small business’ success. Many industries, such as retail and food service, can rely on daily cash flow from customer sales coming into the business.
Healthcare providers, such as doctors, dentists, psychiatrists, and home healthcare services don’t have that luxury. While patients are seen daily, a medical practice typically receives only a small co-payment at the time of service, with the bulk of their revenue being paid much later from a third party payer. With fluctuating operating expenses creating a strain on the business due to frequent delays in reimbursements from Medicare, Medicaid, and other insurance companies, many healthcare providers seek to augment their business capital from a third party lender.
While traditional banks can offer these providers access to funds, their process is cumbersome and can take plenty of time, and is often reserved for only pristine customers. Some healthcare providers have turned to merchant cash advance products, but the daily debits can wreak havoc on their bank account, momentarily curing the pain, but eventually kill the patient. Since most healthcare practices receive reimbursements and insurance payments on a specific day of the week or month, that fixed, daily debit does not work for their business model.
Atlanta-based ProviderWebCapital introduced a working capital product called Remit eXL, designed to alleviate healthcare industry cash flow constraints. The innovation of Remit eXL is based on the repayment structure provided for in their agreement. Based on revenue recognized by the business, Provider Web is repaid through a percentage of the weekly revenue stream. For example, if a home healthcare business is facing a slowdown in payments, Provider Web will ride out that slowdown with them, rather than demand a fixed repayment sum like competing products.
Provider Web utilizes its Remit eXL working capital product to maximize their client’s working cash. Company chairman Chris Stenglein explained their lending philosophy, saying “We prefer to think about our product as an investment in the client’s business, rather than the ideology of a traditional lender. We’re there to help clients grow and our flexibility gives us a clear, effective niche in the alternative lending industry. Remit eXL stands out from competing products, giving our clients an innovative option to finance their operations.”
When asked about Provider Web’s greatest strength, Stenglein stated, “Provider Web’s number one differentiator is our flexibility and ease of working with client situations. We work with clients on an individual basis, with customer service based on their real-time situation. We recognize that running a small business is tough, particularly in the healthcare industry, and if a client is having issues, we’d rather work with them toward the solution, rather than demanding payment at the wrong moment.”
Provider Web Capital typically provides credit lines ranging from $10,000 to $250,000 to health care providers who are paid by third party payers.
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