Working Capital for Medical Practices
You hired a new physician who starts Monday. Credentialing takes 4 months. That is $180,000 in salary before a single claim can be submitted. Working capital loans bridge predictable healthcare cash gaps so you can grow your practice without waiting for reimbursement timing to align.
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Working Capital in Healthcare
Medical practice working capital requirements are driven by reimbursement timing, credentialing periods, and the structural gap between care delivery and payment.
The Reimbursement Float
A medical practice typically has 1.5-3 months of revenue outstanding as accounts receivable. A practice with $400,000 monthly revenue might have $600,000-$1.2M permanently tied up waiting for insurance payments.
Credentialing Capital Requirements
Adding a physician requires 3-6 months of salary ($45,000-$75,000 monthly) before credentialing enables billing. Each new provider creates a predictable $180,000-$450,000 cash need.
Payer Mix Cash Impact
Medicare pays in 14-30 days. Commercial payers take 30-45 days. Medicaid stretches to 60-90 days. The same volume generates different working capital needs based on who pays.
Undercapitalization Risk
Insufficient working capital constrains practice growth and can force suboptimal decisions. Many practices operate closer to the edge than necessary because reimbursement timing consumes available capital.
Healthcare Cash Flow Challenges
Working capital problems in healthcare are not about profitability. Profitable practices struggle when reimbursement timing does not match operational needs.
Reimbursement Timing Mismatch
Services rendered in January generate cash in March or April. But January payroll, rent, and supplies required payment in January. The gap is structural.
New Provider Investment
Every new physician requires 3-6 months of salary and benefits before credentialing enables billing. Growth requires significant upfront investment.
Payroll Constancy
Staff expects payment every two weeks regardless of insurance payment timing. Payroll is non-negotiable and cannot wait for reimbursements.
Denial and Rework Delays
Denied claims require correction and resubmission, extending already long cycles. Even modest denial rates create cash flow disruption.
Equipment Opportunities
Equipment purchases require capital that is tied up in receivables. Good deals pass while waiting for reimbursement timing to align.
Growth Constraints
You could add locations, services, or providers, but growth capital is trapped in AR. Expansion stalls waiting for cash to catch up.
Working Capital Application Process
From application to funding in days, not weeks.
Application
Complete online application with practice information and capital needs.
10 minutes
Documentation
Provide bank statements and optionally AR aging or practice financials.
Gather documents
Evaluation
We review financials, reimbursement patterns, and practice performance.
24-72 hours
Funding
Accept terms and receive funds deposited to your practice account.
Same or next day
Cash Flow Support for Medical Practices
Working capital loans provide the financial cushion medical practices need to operate smoothly. Bridge reimbursement gaps, fund credentialing periods, and manage cash flow without the stress of waiting for insurance timing.
Revenue Cycle Understanding
We evaluate your practice based on reimbursement patterns and payer mix, not retail business metrics. Healthcare-appropriate evaluation.
Credentialing Support
We understand that new providers create predictable cash gaps. Factor credentialing periods into your capital planning.
Flexible Use
Payroll, supplies, equipment, rent, or any legitimate practice expense. Deploy capital where your practice needs it.
Fast Decisions
Practice needs do not wait for lengthy bank processes. Get capital decisions in hours to days.
Payment Options
Daily, weekly, or monthly payment structures to match your cash flow patterns.
Renewable Access
Build a track record for access to additional capital as your practice grows.
Working Capital Applications
Common scenarios where medical practice working capital makes the difference.
New Provider Credentialing
Fund 3-6 months of physician salary while insurance credentialing completes. Necessary investment for practice growth.
Typical funding: $100K-$300K
Reimbursement Bridge
Cover operating costs while large insurance payments process. Bridge predictable revenue cycle gaps.
Typical funding: $50K-$200K
Payroll Security
Ensure payroll is covered regardless of reimbursement timing. Never stress about making staff payments.
Typical funding: $25K-$150K
Equipment Down Payment
Generate cash for equipment purchase without depleting working capital reserves.
Typical funding: $25K-$100K
Location Expansion
Capital for buildout, equipment, and operating costs when opening an additional location.
Typical funding: $100K-$400K
Payer Contract Transition
Bridge revenue gaps when transitioning between payer contracts or adding new insurance panels.
Typical funding: $50K-$150K
Working Capital Options for Medical Practices
Understanding available options for healthcare working capital.
| Feature | Working Capital Loan | Bank Line of Credit | AR Financing |
|---|---|---|---|
| Speed | 24-72 hours | 30-60 days | 24-48 hours |
| Collateral | Often none | Usually required | AR |
| Payment Structure | Fixed schedule | Interest on draws | When payers pay |
| Healthcare Expertise | Specialized | Limited | Specialized |
| Use Flexibility | Any purpose | Any purpose | Tied to AR |
| Qualification Focus | Practice performance | Credit/collateral | AR quality |
| Best For | General capital needs | Ongoing access | Specific AR |
| Total Cost | Moderate | Lower | Per AR batch |
Working Capital Requirements
General requirements for medical practice working capital loans.
Practice History
Operating medical practice with established patient volume and billing history.
1+ year for most products
Practice Revenue
Demonstrated revenue from patient services and insurance reimbursements.
$250,000+ annual
Payer Contracts
Active contracts with commercial insurers and/or government payers.
Credentialed with payers
Bank Activity
Business bank account showing regular deposits reflecting practice operations.
3+ months statements
Cash Flow Pattern
Deposit patterns demonstrating ability to handle repayment.
Consistent deposits
Current Obligations
Current on existing practice obligations without active defaults.
No current defaults
Strong practice revenue and healthy AR can overcome other factors. We evaluate each situation individually.
Real Results
Dr. Robert T.
Orthopedic Surgery Practice, Atlanta GA
The Challenge
Robert's practice recruited a fellowship-trained sports medicine surgeon at $55,000 monthly total compensation. Credentialing with major payers would take 5 months. He needed $275,000 to fund the surgeon's compensation before billings could begin.
The Solution
We structured $300,000 in working capital with monthly payments of $17,500 over 24 months. Payments began after a 90-day grace period to align with initial revenue from the new surgeon.
The Result
New surgeon credentialed in 4.5 months and immediately productive. Sports medicine services added $120,000 monthly in revenue. The investment paid for itself within the first year. Robert has since added two more surgeons using similar financing.
“Adding a surgeon means $250,000+ commitment before they can bill a single procedure. Working capital financing let me make that investment without draining reserves needed for operations.”
Healthcare Working Capital Data
Industry benchmarks for medical practice working capital needs.
Working Capital Advantages
Why medical practices choose working capital loans.
Provider Growth Support
Fund new physician credentialing periods without constraining practice operations.
Payroll Security
Never stress about making payroll regardless of reimbursement timing.
Revenue Cycle Buffer
Smooth cash flow across reimbursement cycles and payer timing variations.
Equipment Flexibility
Have capital available for equipment opportunities without waiting for AR timing.
Vendor Relationships
Pay suppliers within terms to maintain relationships and capture any discounts.
Growth Platform
Working capital supports practice scaling without capital constraints.