MTIA Increases Membership Dues

Dedicated to funding MTSOs, PRN Funding has been a proud member of the Medical Transcription Industry Association (MTIA) for eight years. Naturally, PRN Fumding was intrigued when received a mailer from the 2009 President of MTIA, Linda Yaniszewski, informing us that the 2010 membership rates were increasing.

MTIA formally unveiled it’s Vision 20/20 Campaign at the 2009 AHIMA Conference. This week’s mailer solidified the changes in membership pricing.

There are now three membership tiers to choose from, all with a hefty price:

Gold – $10,000
Silver – $5000
Bronze – $2000

Q: What do you think about MTIA raising their member fees?

Factoring Terminology

Entering into the world of accounts receivable factoring can seem overwhelming if you are not familiar with factoring industry jargon. We’ve identified and defined some of the more common factoring terms for our readers below:

Account Creditor – You, the Client and provider of goods or services.

Account Debtor – The purchaser of goods or services; responsible for the paying invoice.

Advance Rate – Money provided immediately to the company factoring its accounts receivable–expressed as a percentage of the total invoice amount.

Discount Fee – A fee assessed by a factor that purchases accounts receivable. The discount fee is determined by the size of the invoice, the length of time it takes to collect the funds and the creditworthiness of the customer, not the company selling the receivable.

Factor – A company that provides operating capital to businesses by purchasing their accounts receivable.

Factoring – The business of purchasing and collecting accounts receivable.

Non-Recourse – Generally, a period in which accounts purchased by the factor remain the factor’s accounts and do not revert to the account creditor if unpaid due to an insolvency event. The factor accepts full credit risk for any and all accounts that it purchases during this period.

Recourse – Generally, a period in which accounts purchased by the factor are able to revert to the account creditor if unpaid due to an insolvency event. The client accepts full credit risk for any and all accounts that it sells to the factor during this period.

Reserve – Amount of money that is not immediately provided to the company factoring its accounts receivable when the account is purchased by the factor, expressed as a percentage of the total invoice amount.

Reserve Release – A bonus paid back to you as a result of prompt paying of receivables by your customer. (Advance Rate + Reserve = 100% of Total Invoice) The Reserve, minus the discount fee, is transferred to the client once payment is received by the factor.

Click here to learn more factoring terminology.

Don’t Use Retirement Funds to Start a Business

BusinessWeek’s SmartAnswers columnist, Karen E. Klein was recently asked: “I’d like to start an independent…business and have $50,000 in IRAs. Should I cash in my IRAs or get an ERSOP?”

To which, Klein responded:

“Cashing out your retirement savings, or investing it in a startup venture…is inherently risky and ill-advised. If things don’t work out…not only will you have no income, but you’ll also have no life savings.”

Here are some ways Klein suggested this entrepreneur raise startup capital:

  1. Ask friends and family
  2. Research commercial lenders who specialize in your company’s industry
  3. Reach out to nonprofit microlenders
  4. Consider angel investors

Another financing option entrepreneurs should consider is invoice funding. With this type of financing, a business owner sells his/her invoices to a factoring firm, who then advances up to 90 percent of the invoice immediately. Business owners can use the cash immediately to cover payroll, taxes and equipment costs instead of waiting weeks or months for their customers to pay them.

Click here to see the rest of Klein’s advice on using retirement funds to start a business.

PRN Funding Invited to Exhibit at Private Duty Expo

Las Vegas, NV–PRN Funding, LLC will be exhibiting for the first time at the Annual Private Duty National Conference and Expo from November 16-18.  The conference will be held at Caesars Palace in Las Vegas, NV.

President, Phil Cohen, and Marketing Manager, Nikki Flores, will be on hand in booth #211 during exhibit hall hours. Private duty home care agency owners are encouraged to stop by the booth to learn how home care factoring can help them maximize their cash flow.

With years of experience in healthcare industry, PRN Funding has a precise understanding of the unique challenges within the private duty home care industry. PRN Funding offers financial resources to these companies by purchasing their accounts receivable–a process known as ‘factoring’, which provides the cash needed to sustain and grow a healthcare business.

Alternative Funding Options for Small Business Owners

Diana Ransom, a small business reporter for the Wall Street Journal, has some tips for financing your small business.  Business owners are discovering that their typical sources are restricting loans’ credit terms as well as the number of loans they give out.  An April survey done by the Federal Reserve shows 75% of domestic banks are tightening credit for small businesses, up from 70% in January.  Credit card companies are also increasing their rates and limiting their terms for small business cards, if they still offer small business cards to begin with.  While traditional lines of credit dry up, below are five alternative sources of funding for small businesses:

Government-backed loans: The Small Business Administration (SBA) started to guarantee up to 90% of some loans.  According to Brian Hamilton, CEO of Sageworks in North Carolina, preferred SBA lenders might be more apt to give your business an SBA-backed loan.  Ever since President Obama signed the American Recovery and Reinvestment Act (ARRA) in February, the weekly loan dollar volume has increased more than 40%. 

Community banks and credit unions: As the lending situation improves, community banks are looking to issue more loans.  Also, as larger lenders tighten their terms, credit unions will have the option of taking on more small business loans.

Peer-to-Peer networks: Websites such as Prosper, Virgin Money and Lending Club allow borrowers to find individual private contributors online to fund their businesses.

Microlenders: Recently, the higher rates generally given by microlenders have come down.  One microlender, Accion, reduced its rates from between 11% and 18% to between 8% and 15%.  In addition, the SBA offers microloans at rates between 8% and 13%. 

Accounts Receivable Factoring: Although CIT, one of the nation’s largest factoring firms, is going under, there are plenty of other smaller and comparable factoring firms that will advance you up to 90% of the receivable.  PRN Funding, LLC is one of those factoring firms.

Click here to read the entire Wall Street Journal article: Five Alternative Sources of Funding

Jobs in Health Care Rising

President Obama’s Council of Economic Advisors released a report Monday surveying the parts of the labor force that are expected to grow most rapidly in the future.  The report is a reminder to everyone in the health care industry that it is one of the few industries still growing.

Specifically, professions in health care including home health care, outpatient care, and medical laboratory positions will add the most jobs. 

This is good news to our clients as well as to entrepreneurs looking to start their own healthcare-related business!

Click here to read the complete New York Times article: Job Growth in Health is Expected to be Strong

Obama Talks Health Care on ABC

As President Obama advocates for a health care system overhaul, many Americans are questioning how it will function as well as how the country will pay for it.  The Wall Street Journal’s Health Blog profiled Obama’s televised town hall meeting on ABC last week to try and explain his plans in more detail.

The President assured Americans that the government will not force them to switch doctors or health insurance plans.  Also, private companies will still be able to choose different plans for their employees on their own.  However, critics argue that given a cheaper government option, most businesses will jump ship from private insurance companies. 

Health insurance companies feel threatened by the proposal, stating that a government program would put them out of business.  Obama responded to these concerns by admitting he wasn’t sure a government plan would be included in his final proposal.

Additionally, Obama explained that the funding for his health care system would either come from lowering the amount that wealthy Americans can deduct on their taxes or from taxing health benefits. Regardless of how he accomplishes this, many wonder if Obama will be the first president to solve the problem of uninsured Americans.

Little is known right now about how President Obama’s healthcare reform will affect healthcare vendors like medical billing and coding companies and/or temporary nurse staffing agencies. They will have to wait patiently to see how the President’s changes will affect them.

To read the entire Wall Street Journal Blog article, click here: Separating Fact from Fiction on Health-Care Reform

To view a clip of the town hall meeting, click here: President Obama Defends Right to Choose Best Care

For a full transcript of the meeting, click here: Questions for the President: Prescription for America

Economic Recession is Helping the Nurse Shortage

In the past, PRN Funding’s nurse staffing factoring specialists have blogged about the effects of the economy on the nurse shortage. Today’s Wall Street Journal had more proof that the economic decline is helping to ease the nursing shortage, though some people think that once the economy turns around, the the nursing shortage could quickly reignite.

Long story short, many nurses who had previously left the field during better economic times have been returning in droves to compensate for a spouse’s lost income and/or health benefits.

According to the WSJ article, about half of the nurses who boomeranged back into the profession were over 50. As those nurses continue to age and retire from the field entirely, the shortage will most likely widen.

Click here to read the entire article: Nursing Shortage Eases With Recession’s Help.

President of PRN Funding Appointed to Factoring Association Advisory Board

Philip Cohen, president of PRN Funding, LLC, was one of six selected to the International Factoring Association Advisory Board.

As a new board member, Mr. Cohen will be asked to provide guidance and feedback to the association’s executive director, Bert Goldberg. Together with the other board members, Mr. Cohen will also be responsible for communicating up-to-date factoring industry information to the entire International Factoring Association (IFA) membership base.

“I’m honored to be given the opportunity to help shape the International Factoring Association,” Mr. Cohen said. “I’m eager to get started.”

Founded in 1999, the mission of the IFA (www.factoring.org) is to disseminate information to the factoring community in regards to developments and changes in the factoring industry and to provide a forum for educational meetings and seminars.

“The IFA is the largest association in the world available to the factoring and commercial finance industry,” said Mr. Goldberg. “The newly appointed advisory board members were selected to help shape future endeavors for the association.”

With years of experience in healthcare services, PRN Funding has a precise understanding of the unique challenges within the demanding business of serving vendors to healthcare institutions.

Entrepreneurs Notice Credit Lines Disappearing, Should Turn to Factoring

BusinessWeek.com recently published an article that put JPMorgan Chase bank in the spotlight, as the bank started reducing or eliminating credit lines  for a large number of small business owners to help even out its balance sheets.

According to the article, in most cases, “If business owners can’t convince Chase of their creditworthiness, they have three options: 1) pay off the balance in full; 2) agree to a conversion of the line of credit into a term loan; or 3) go into default.”

One business owner interviewed for the article described how his four lines of credit were reduced to two on the exact same day that he received a letter from Chase that the bank was blocking him from drawing on two lines of credit due to “an adverse change in his ‘financial condition and/or credit history.'” The entrepreneur had been drawing on all four of the lines to help meet his monthly payroll, and he’s not sure where the money will come from if he’s not able to reistate the two lines.

As banks continue to reduce and eliminate credit lines, there will continue to be an influx of established healthcare business owners who are in this same situation. Lucky for them, there is an immediate answer to their cash flow problems.

Home care agencies who need additional funding to pay their sitters and companions, medical transcription service owners who are waiting a long time for hospitals to pay, and medical coding companies who are looking to expand can and should take advantage of healthcare accounts receivable factoring programs to help them at a time when more traditional funding avenues are failing them.

Click here to read the entire article: Snipping Credit Lines for Small Businesses.

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