Can Factoring Help Group Homes?

If a facility that providers group homes for the developmentally challenged, factors its receivables is that a solution for the reduced reimbursements coming from Medicare and Medicaid?

Factoring adds no new money to the business using that form of finance. So, the immediate answer may be no! However if the facility has been very profitable and the reduced payments has reduced profits to the point that such profits cannot sustain the need for cash flow (due to slow pay) then it can help. Group Homes need cash flow to sustain its many services that are provided. Typically Medicare or Medicaid payments may come between fifteen to forty-five days. In the past, with large profits being put to work generating cash to offset short-falls from delayered payments these vital services can be maintained. It is those type of facilities that are operating at a “book” profit but cash-flow shortage that can benefit from factoring.

Xynergy Healthcare Capital has identified these providers and carefully scrutinizes their financial wherewithal for the opportunity to improve cash flow to profitable by cash-strapped group homes. Many owners are feeling the pressure of not meeting monthly bills, most importantly payroll, and think that perhaps they are financially unsustainable. In numerous occasions however Xynergy has given the good news to them that “we can help.”