When pharmacy customers pick up prescriptions, the pharmacy receives a co-pay upfront. The majority of the pharmacy’s income, however, comes from insurance providers. You don’t have to be in the healthcare industry to know how that insurance providers aren’t exactly easy to work with. Policies change, prescriptions get billed incorrectly, processing gets delayed, and the only way to stay up-to-date with these issues is to contact the provider yourself.
So, it should be no surprise that their reimbursements often come in several months after a prescription is picked up. If pharmacies don’t keep tabs on providers on a constant basis, there’s a chance they might not receive reimbursements at all. Delinquent payments become even more hazardous when more and more operational funding gets tied up in inventory, which is already more expensive than conventional retail items.
Pharmacies are frequently suggested to offset their elongated business cycles by implementing new services. Some have increased daily revenue by offering immunizations or disease-specific management programs. But expansion comes with a cost, which seems a lot higher when you barely have enough cash on hand to pay your bills during certain months. The same dilemma applies to investing in new technology designed to improve organization and streamline productivity.
United Capital Source can bridge the gap while you wait for patients’ insurance firms to reimburse you. UCS has many years of experience facilitating Small Business Loans for Pharmacies. We have access to all types of business lending products. Contact us today for your FREE business funding consultation!
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New Location/United Capital Source works with many businesses that do not get paid in full after making sales. With accounts receivable factoring, their business cycles are shortened to just a few days. This type of working capital loan can be accessed as soon as a provider is billed. The business lender purchases the unpaid receivable for a discount price and pays the pharmacy upfront. It is now up to the business lender, not the pharmacy, to collect the original payment from the provider.
Accounts receivable factoring allows you to stay current on bills, save money for growth-related investments, and maintain profit margins. You could also purchase bulk inventory or increase staff when it actually makes sense to do so, as opposed to waiting for your budget to stabilize. In addition to simplifying inventory management, consistently paying vendors well ahead of due dates typically makes you eligible for discounts.
A business line of credit is another sensible option for businesses that are prone to gaps in cash flow or unforeseen expenses. Many UCS clients use business lines of credit to cover monthly expenses during an unusually slow month or after a significant purchase, like new equipment.
For larger, long-term investments, we might recommend a working capital loan or merchant cash advance. The latter option is popular for healthcare businesses since most patients pay with debit and credit cards. Payments are tied directly to sales, which makes merchant cash advance ideal for ordering inventory that will not be sold right away. Slower sales or seasonality won’t make your payments any bigger. And since eligibility is based primarily on revenue from debit and credit transactions, perfect cash flow isn’t a mandatory requirement for approval. Apply now to see how much you qualify for!
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Business growth is a scary endeavor. There are so many uncertainties and potential mistakes lying ahead. First off, it’s often difficult to tell if your business is even ready to grow at all. Is this the right time to make significant changes? How do you know if you’re growing too fast? Countless failed businesses believed they were ready to grow, only to discover that they were not as successful as they thought, or were not equipped to take on a new level of competition.
