The Healthcare Industry always has to prepare ahead. Whether it’s for patients or for trends within the industry itself, it is a field that has to stay on red alert. As an industry that is constantly evolving, it can be difficult to handle every-day inventory or even finance investments like new equipment and technology. This makes healthcare one of the few industries that have both immediate requirements, as well as long-term expenses and investments. The healthcare industry requires financing that can help tackle both.
Several financing options address the pressing financial needs of clinics, pharmacies, and other healthcare small businesses. These can be either traditional or alternative financing.
Traditional Financing is provided by banks and credit unions. This is one of the hardest financing options to get, with studies showing over 80% of small business owners are denied a loan. Although traditional funding generally offers the best interest rates, they can be quite difficult to get. To pose an even a bigger problem, traditional funding is an extensive process and it may take several months to get approval.
This is why choosing alternative funding may be the best option for immediate working capital required by the healthcare industry.
- Qualification for the Loan: Qualifying for a loan from traditional lenders isn’t easy. They require collateral, tax returns, bank statements for a year, a good personal credit score and an amazing business plan. Many small healthcare businesses can’t afford to pledge collateral, or even put up equipment or any other assets they use day-to-day to run their business on the line. A good personal credit score isn’t held by most business owners. Alternative Funding makes things easier for healthcare business owners. Applying for alternative financing doesn’t require collateral, and accepts even poor credit scores. In fact, they only ask for a minimum of three bank statements and no business plan.
- Costs and Fees: It stings to pay money when you need it. Unfortunately, traditional loans require you to pay non-refundable fees in the form of origination fees, application fees etc. Most alternative lenders don’t charge any fees.
- Quicker and Flexible: The healthcare industry has to face emergencies every day. Outbreaks of the flu faced this year and other epidemics mean the healthcare industry would require hiring more staff and expanding care facilities. The financing to bear the sudden surges would have to be immediate and through a streamlined process; exactly what alternative financing does. Traditional financing, however, has a regulated and lengthy process and it may take several weeks to get the extra money. Alternative financing can reach you as quick as 48 hours.
How can Alternative Financing help your healthcare business?
Labor Costs: In the service field, human capital is the biggest asset. According to the American Hospital Association, labor costs contribute to the most expenditure in the healthcare industry. Alternative Financing can help hire the staff your business needs.
Tests and Technology: Every year the healthcare industry spends over billions of dollars on tests and technology according to the Boston Globe. Financing for such large amounts have to be gathered from several sources of finance and alternative financing can prove as a one-stop shop for the capital required.
Supplies and Capital Expenses: Over 15 percent of healthcare business’ expenses are from supplies for patients. Expanding the hospital, building a new wing or creating rooms for new equipment can also be financially extensive. Alternative Funding can help finance all these business requirements almost immediately from the date of application.
Besides these every-day costs, several trends in the healthcare industry can also be quite expensive. 2018 was a landmark year in the healthcare industry with new innovations, IT, medical devices and equipment making their mark.
Healthcare Business Trends for 2019:
- The end of the individual mandate: The individual mandate was created in 2010 under the Affordable Care Act and required Americans to buy health insurance or face a penalty. Under the Tax Cuts and Jobs Act, passed by Congress and signed by President Trump, it will be eliminated in 2019. Due to this, the industry may experience a surge in uninsured and underinsured individuals.
- Developments of AI: The benefits of AI in the healthcare industry is becoming more widely recognized. In the year 2018 alone, over three-quarters of health care providers invested in AI according to PWC Health Reports. The best use of AI is to automate routine tasks, robot-assisted surgery, and dosage-error reduction. The need for AI will only increase in the coming years ahead.
- Internet of Things (IoT): The Internet of Things has seen expansive growth and is expected to see more in the upcoming years. From remote monitoring to wearables, smart sensors, and mobile apps- the IOT developments are aimed to maximize resources to facilitate better engagement, productivity, and connectivity of physicians and doctors with patients.
- Precision Medicine: Although specialty drugs and gene therapy will apply only to a small segment of the population, the costs are high enough to affect employer healthcare spending in 2019. The onset of precision medicine also indicates a shift in trends from the standard fee-for-service model as patients won’t be required to visit hospitals as much as they would have needed to.
- Mega-mergers: Several merger deals kicking off in 2019 has expanded the provider landscape and consolidated entities gaining market share and power can only indicate an increase in prices.
All of these factors and several more dominate the cash flow of healthcare businesses. With the right preparation and finance, it’s easy to handle your business on the front-end, as well as the back-end. Check out Reliant Funding’s short-term solutions to match your business requirements today.