Part of PRN Funding’s commitment to maintaing strong relationships with our factoring referral network is writing articles for various invoice factoring publications. Now we’ve made it even easier for brokers to access those articles via a special section on our web site: Factoring Broker Articles. Check out one of the video description below:
Factoring Prospects: Weeding Out the Bad to Find the Good
As cash flow consultants, it’s your job to deliver companies with cash flow issues to the appropriate funding source. Although this task sounds easy enough on paper, in reality, it’s not always a simple feat. Picture this scenario: You find a candidate in need of cash flow who has been in business for two years, gets paid in less than 45 days and wants to expand. Eager to help this business owner get the cash he needs to expand, you refer this person to one of your factoring sources immediately. The factoring company has communicated to you that they are interested in pursuing the deal, and they’ll have an update for you as soon as they reach out to the prospect. The next day, you get a phone call from the factoring firm telling you that they are no longer interested in the deal. Has this ever happened to you? If so, then I have some good news. There are three questions cash flow consultants can ask their prospects that will drastically reduce the chances of the above situation ever happening again. And if it hasn’t happened to you yet, and you’re not asking the appropriate questions, then it’s only a matter of time before it will happen. Continue reading…
A Nurse Staffing Agency Finally Gets Approved for AR Financing
In an attempt to get her company started, this Illinois nurse staffing agency owner borrowed from friends and family, maxed out all of her credit cards and fell behind on her bills. Naturally, her poor personal credit was greatly hindering her ability to obtain ongoing business financing from a traditional lender.
Frustrated from being turned down, the nurse staffing agency owner started researching alternative financing options and came across PRN Funding’s nurse staffing invoice funding web site. Through her research, she learned that PRN Funding based its credit decision on her customers’ creditworthiness, rather than her own. The agency owner applied online that day and after hearing ‘no’ for so long, she was finally approved for a line of credit.
An Allied Health Staffing Agency Works with Long-Term Care Facilities
Two business partners from Louisiana knew that in order for them to start a successful medical staffing agency in a down economy, they would have to focus a specialized staffing niche. So instead of placing RNs, LPNs and CNAs, they chose to focus on providing various types of therapists to help fill gaps exclusively at long-term care facilities. Within two months of opening their doors, the savvy business partners had more shifts to fill than therapists. However, they couldn’t hire additional therapists because their cash flow was continuously held up by slow payments from the long-term care facilities.
The business partners were familiar with factoring, and they knew that most general factors wouldn’t be comfortable purchasing receivables that could consistently age out past 90 days. Luckily, a friend of one of the partners suggested they approach PRN Funding because it was a factoring firm that specialized in allied health factoring. The business partners called in on a Friday, received documents the next day, and factored their very first allied health invoice by the end of the week. Having a better cash flow allowed them to bring on three new therapists that month, and they haven’t had to turn down new business since.
Tennessee Business Owner Uses Medical Coding Invoice Factoring to Improve Cash Flow
When this entrepreneur first started her medical coding business, she coded exclusively for one physician. Over the years, the business owner’s outsourced medical coding services expanded steadily. She gradually started hiring new coders and while simultaneously adding multiple doctors to her portfolio. Then the economy turned south, and with it, the business owner’s receivables started coming in slower.
At first, the medical coding entrepreneur tried to make up for the lack of cash flow by paying her own bills with credit cards, and paying the coders out of her own pocket. It didn’t take long before her credit cards were maxed and her savings account had dwindled. While flipping through an industry magazine, she found an ad for PRN Funding’s medical coding factoring services. According to the ad, PRN Funding’s factoring services could help her get paid quicker, so she dialed the toll-free number and was connected to a medical coding factoring specialist immediately. Two weeks later, she submitted her first medical coding invoice for factoring, and she worried less about her company’s cash flow.
Did anyone see the front page of the Wall Street Journal today? There’s an inspiring article that every small business owner and future entrepreneur should read: Banks Open Loan Spigot.
According to the article, “Moody’s Analytics estimates that commercial and industrial lending in the fourth quarter has grown .02% from the third quarter, to $1.22 trillion, the first quarterly increase in two years.” Moreover, when business lending increases, it’s usually a good sign that the economy is well on its way to recovery.
Although new activity varies from bank to bank and industry to industry, JP Morgan Chase, U.S. Bancorp and Wells Fargo have all seen increases in lending and credit availability.
It’s important to keep in mind that lending typically rises toward the end of the year as companies increase inventories, so some analysts warn that the uptick may not stick around in 2011.
The PNC Economic Outlook Survey was conducted between July 29 and August 25, 2010 by telephone within the U.S. among 1200 business owners or senior executives of small and medium-sized businesses with annual revenues of $100,000 to $250 million.
Some of the results were printed in Nov/Dec 10 edition of The Secured Lender magazine. The A/R funding specialists at PRN Funding, LLC wanted to share some of the survey’s interesting findings:
75% of small business owners foresee greater access to financing in 2011, though they do not anticipate applying for it.
42% expect their sales to increase in 2011
31% expect profits to rise in 2011
One-third of small business owners say weak sales/demand for service is the most important challenge facing their company today. Followed by a general concern for “changes in government policy that affect my business.”
Check out page 15 of The Secured Lender to read the rest of the survey’s results.
The medical transcription factoring specialists at PRN Funding recently invited one of our current medical transcription clients to “spill the beans: in a tell-all interview about how PRN Funding helped her MT service more than double in size. Although it’s posted on PRN Funding’s web site, we also included a copy of it on The Factoring Blog for all of our MTSO readers:
Launching a New Company In May 2009, Terri Davis started Clear Choice Transcription, a diverse transcription company specializing in the medical field. Having spent 13 and a half years in the industry, Davis knew she would need help managing cash flow to meet payroll and keep vendors happy until the client payments started coming in. She also knew standard financing was not an option. This is when she decided to look into special medical transcription factoring.
“When we launched, our largest client was giving us overflow work only, and some of the smaller clients who were paying very quickly were not enough to fund payroll for future growth. Similar to other business owners in this industry, I did not have a lot of tangible assets to offer a bank as collateral. That’s a good thing in that there’s not a lot you need to purchase, but it made it very difficult to get standard financing,” says Davis.
A Flexible Factoring Lender Clear Choice Transcription’s flexibility in working with their customers gives them the ability to work with different size medical practices, as well as clinics and hospitals. Clear Choice offers differing pricing structures and domestic and overseas transcription options, works within varying Electronic Medical Record (EMR) programs, and with different dictation styles and templates. And so they appreciated a lender who was flexible working with them.
That flexibility, and expertise, is what sold Davis on PRN Funding, even though they considered other funding partners.
“They were very knowledgeable in the medical transcription industry, and the information I received was very impressive. From the very beginning, they worked with me whenever we needed something a little different. For instance, we had to break a large client’s invoice down into different parts due to issues with the client’s billing system. Instead of simply saying no, PRN Funding immediately presented a very easy factoring solution and it worked out very well,” she says. “And I genuinely like the people at PRN Funding. Their response time is great and they made me feel we were on the right track in partnering with them.”
PRN has an intimate knowledge of the medical transcription industry that helps them help their clients.
“We’re unique in the medical transcription factoring industry in that before I started PRN Funding I worked for the nation’s largest medical transcription company,” says founder Phil Cohen. “So I know the industry inside and out and we have a good number of clients in the space. Having worked in the industry for such a long time, my account managers and I bring a lot of expertise to the table.”
Stabilizing Cash Flow
“In this business, as I am sure with most, without cash flow you’re dead in the water. You can’t pay your people, you can’t move forward, and growth is most times impossible,” Davis says. Medical transcription financing was a great option for Clear Choice Transcription, allowing Davis to bring in the people she needed in order to take on more work while continuing to meet payroll obligations. ”
Terri’s largest client was having some issues with their accounts payable system, getting invoices processed, and there were invoices that were aging out past 60 days,” Cohen recalls. “She was stressed about the fees involved with medical transcription funding, but it was nothing compared to the stress she would have felt if she wasn’t able to make payroll.”
Quadrupling Business Growth
Medical transcription factoring with PRN Funding gave Davis the stable cash flow she needed to quadruple Clear Choice billings in just a nine-month period.
“Thanks to PRN Funding, we had the cash flow we needed to bring in enough people to convert this very large client into a full service account, instead of just the overflow work we had been receiving. That was a huge growth for us. It also helped us bring on new clients, too,” Davis explains.
In the beginning Clear Choice had 25 medical transcriptionists in the U.S. and an offshore vendor. Today, they have 110 medical transcriptionists in the U.S. and about 150 on their offshore team. In a very short time frame, Clear Choice Medical Transcription had grown dramatically.
Value-Add: Peace of Mind
To Davis, knowing she has PRN Funding behind her gives her a secret weapon in the competition for new clients.
“It’s the security of having them there. If there’s a client we’re chasing after and their terms need to be extended to 45 or 60 days, knowing in the back of my mind that I have access to the cash flow immediately after invoicing gives me a very big bargaining chip with the prospect. It’s very helpful in bidding on new clients, to know that we can accommodate their needs without over-extending ourselves.”
As an ongoing PRN Funding client, Davis is excited about the future.
“In this industry, if you don’t have a huge bankroll in the beginning it’s very difficult to get started. We were lucky to find PRN Funding in the beginning, and I’m looking forward to continued growth,” Davis says.
The allied health staffing factoring specialists at PRN Funding recently invited one of our previous respiratory therapist staffing clients to “spill the beans” in a tell-all interview about his experiences with using PRN Funding as a medical staffing factor . Although it’s posted on PRN Funding’s web site, we also included a copy of it on The Factoring Blog for all of our medical staffing agency owners to read:
The New “Old-time” Banker: Growing in a recession
When Greg Donnelly bought a small respiratory staffing company in 2006, he immediately set to work growing the business, focusing on providing excellent care and nurturing solid client relationships. First Select Medical Staffing gained a foothold in the market and began to grow, from five therapists to 51. What Donnelly didn’t count on was the deepening recession and resulting credit crunch. His relatively new fast-growing company needed funding for payroll: his first payroll in 2006 was $700, and by April of 2008 it was $40,000 every two weeks.
“Banks weren’t lending to small businesses, especially one that was a staffing company: they didn’t have a lot of experience with companies like mine,” Donnelly recalls.
“I wanted someone who would understand my business and had a track record. Right off the bat his company name told me he understood the medical field. PRN is medical shorthand for patient administered treatments, on an as-needed basis. When we first met and I showed Phil my business plan with my respiratory niche, the increasing demand due to aging population and the seasonal capabilities of respiratory therapy, he totally understood it. He’s a very knowledgeable businessman and I was very impressed. PRN Funding was very responsive from the very beginning and they stayed right with me for any questions I had. I wasn’t just an entity, they made me feel like I was important to them.”
Phil Cohen, founder and President of PRN Funding, felt that even though First Select was non-bankable, they were a fit for PRN Funding. “First Select met all of our criteria very comfortably. They were a start-up company, selling to customers with very good credit. Unfortunately accounts were taking longer to pay than expected and First Select did not have the cash flow to meet its payroll.”
First Select had contracts with more than 100 hospitals and long-term acute care facilities with customers among some of the best in the nation, such as the Cleveland Clinic. Though his clients were stable, the recession affected their cash flow like all other businesses which resulted in their stretching payables to vendors like First Select Medical Staffing.
AR Funding to survive, thrive, monetize
Factoring was a very good option for First Select, allowing Donnelly to grow the business without worrying about having the cash flow to meet payroll and tax obligations. Additionally, it allowed First Select to grow revenue and, in doing so increase the value of the company. PRN Funding gave Donnelly the flexibility to factor invoices when he wanted, without being locked into a contract.
“What was nice about it was that I’d send in my invoices and funds were always available, whether the amount I needed went up or down. I didn’t have to worry that the cash would be there to meet payroll and other obligations. I could focus on growing my company. I don’t think I would have been as successful without it. Like anything else there’s a price to it, but I found the cost very reasonable in order to have that security blanket.”
Value-add: trusted business counselor
Beyond a medical staffing payroll funding solution, Donnelly found a business advisor in Cohen with whom he could discuss business challenges both operational and financial, and rely on for impartial and educated advice.
“Phil was a great sounding board for me and that’s incredibly valuable when you’re in business for yourself. We’d meet for lunch periodically and he’d give me advice if I asked for it. He’s a very experienced businessman and he’s willing to share his knowledge. He would play devil’s advocate and that helped me make decisions. He was interested in my company’s growth, but I didn’t feel it was because he wanted me to factor more invoices. He was an advocate for my company and its growth, and helped where he could, to survive in such a harsh economic environment.”
“I felt the same comfort level with his people; he had obviously instilled a high work ethic in his employees. My primary representative was excellent. When he was away and I worked with another representative, it seemed as if they had been handling me from day one. I really think it’s the organization Phil built around him that makes PRN Funding stand out.” Finding a buyer: an unusual role
By 2009, First Select was more than doubling in size each year and Donnelly was working 24/7. Other interests caused him to think about selling the business and he turned to Phil for advice.
“He was very sincere about giving me information so that I would maximize my return on investment. He gave me his opinion on the value of my business, the earnings multiple that was appropriate for similarly sized companies in the medical staffing industry, and how to negotiate an earn-out provision from the sale. I found his advice very helpful in negotiations with several strategic and financial buyers. And I thought that was very impressive given that whoever bought the company might not use his services. He wasn’t worried about keeping First Select as a client, he was trying to help me with advice like he always has.”
In an unusual twist, it was Phil who found the buyer for First Select. “At PRN Funding we have a philosophy that is different than most, we don’t treat clients like we are the end game. Factoring is by definition a bridge to get from point A to point B. When a client comes to us and says I’m ready to move on, I think I can go to a bank, we’ll make the introductions and help them package their business whether for a bank, for sale, or self funding. It’s like sending your kids off to college – it’s gratifying to see them grow, but you know you’ll miss them.”
“Phil was sincere about helping me, I still feel that to this day,” Donnelly says. He has since gone on to start another business venture and has no hesitation in calling on PRN Funding again if needed.
“I still stay in touch because he just feels like a good friend. With PRN Funding, I not only gained a funder, I gained a business colleague in Phil. Whenever we met, I’d leave feeling that we’d had a good conversation and he’d offered good advice. When I was younger, you could go to your local bank and they knew you and you called your banker by their first name. If you needed a loan you’d sit down and talk about it, you had a relationship. Guess what? With PRN Funding I found someplace I can do that again.”
There was an article in today’s Wall Street Journal entitled: Fast Money talked about how many companies are using “what was once a controversial way of obtaining quick money–Selling their invoices to a factoring firm.
Although business owners suggest a number of reasons to take advantage of factoring, one of the biggest attractions is no longer having to wait to be paid. Other business owners use accounts receivable factoring to help them get their companies up and running. Still, some business owners see use factoring to help them bridge the cash flow gap for a short period of time.
Still, these same business owners who use factoring also admit that there are some drawbacks, namely the cost of factoring.
The article also included a factoring snap shot for those business owners who are thinking of working with a factor.
Ask Around – Talk to other people in your industry who have used a factoring firm.
Check References – When you find a factoring firm you want to work with, ask them for references.
Choose a Factor who Understands Your Business – Take the time to provide sample invoices for the factoring firm to review ahead of time.
Listen – Communicate with the factor over the phone to get an idea of how the factor will interact with your customers.
Negotiate – Once quoted, try negotiating the rates.
Be choosey – About which invoices you want to factor.
As part of CBaySystems’ IPO, the MT company filed an S-1 Form with the Securities and Exchange Commission. In it, CBaySytems shared a number of fascinating facts about the company as well as unique insights into the clinical documentation industry as a whole.
CBaySystems is the “leading provider of integrated clinical documentation solutions for the U.S. healthcare system.” The following CBaySystems statistics were calculated over a three-month time-span which ended on June 30, 2010:
CBaySystems processed (on an annualized run rate basis) more than 2.9 billion lines on its platform.
CBaySystems has more than 14,000 MTs and MEs.
More than 60% of the 2.9 billion lines CBaySystems processed used ASR technology.
Nearly 40% of the 2.9 billion lines CBaySystems produced were done offshore.
CBaySystems serves more than 2400 hospitals, clinics and physician practices throughout the U.S., including 40% of hospitals with more than 500 licensed beds.
Furthermore, the S-1 Form shared a number of interesting facts about the medical transcription and clinical documentation industry, courtesy of research conducted by ValueNotes Database Pvt. Ltd (ValueNotes). Below of some of the market research firm’s key findings:
ValueNotes estimated that the market for outsourced medical transcription services was $5.4 billion in 2009.
Outsourced medical transcription is expected to grow 8.2% per year over the next five years to $8.0 billion in 2014.
In addition, ValueNotes estimates that the outsourced medical transcription market was 33% of the overall MT market in 2009, and it projects a growth in the market to 38% in 2014.
TRS Institute, the nation’s leading provider of AHDI-approved online medical transcription and speech recognition training programs, announced that it was adding a Medical Billing and Coding curriculum to its course offerings.
The new curriculum will include:
Medical Billing & Reimbursement career preparation
Certified Professional Coding for physician’s offices and hospital facilities
Check out some of PRN Funding’s most recent factoring transactions:
A Nurse Staffing Agency Brings on a New Client
This nurse staffing agency owner was ecstatic when she heard that she had won a contract with a local healthcare network. Being an approved nurse staffing vendor in the system meant that she had the ability to fill shifts in five new facilities. The only problem with this growth opportunity is that in order to become a part of the network, the Alabama staffing agency owner had to agree to 60-day payment terms. She didn’t want to walk away from the opportunity, but she also knew that she would not be able to float payroll for that long.
The business owner remembered a postcard she had received earlier that month from PRN Funding, LLC, an accounts receivable factor who specializes in funding nurse staffing agencies likes hers. She dialed the toll-free number and within minutes was connected with a factoring specialist. After a brief interview over the phone, the agency owner realized that PRN Funding was presently accepting payments from the healthcare network, so she was pre-approved for funding. She factored her first invoice two weeks later and hasn’t had to worry about meeting payroll since.
A Private Duty Home Care Agency Gets Paid Quicker
Providing in-home private duty services and being reimbursed by a state’s Medicaid Waiver program has its pros and cons. On the plus side, state dollars are guaranteed to be paid, but one big drawback is it can take a month or longer to receive those funds. As her client list increased, the owner of a home care agency in Massachusetts was having difficulty adjusting to the state’s new invoice approval process. In short, it meant that the home care agency owner would have to wait 30 days to receive a check instead of the historical two-week turnaround time.
A month before this change in the invoice approval process was to take place; the agency owner contacted PRN Funding because she saw one of their posts on a social networking site. She was relieved to know that PRN Funding was already very familiar with various states’ Medicaid Waiver programs. At the conclusion of her initial conversation, the private duty agency owner filled out a factoring application. The following week, she factored her first monthly invoice and received cash the same day.
A California Healthcare Staffing Business Finally Opens its Doors
Without tangible collateral or a profitable operating history, this California healthcare staffing agency owner was unable to qualify for a line of credit at a bank. He found PRN Funding’s Web site late one night when he was researching small business financing solutions. The entrepreneur submitted an online application, and received a call from a healthcare staffing factoring specialist from PRN the next morning.
Within a week, PRN Funding had approved the agency owner’s first two clients, so he was finally able to start placing employees. The following week, the healthcare staffing business owner factored his first invoice, which provided him with instant working capital to pay his payroll taxes and meet his first payroll.
