Healthcare Factoring
The sale of healthcare receivables, at a discount, in exchange for immediate working capital. A subset of medical receivables financing structured as a true purchase of claims.
What it is
Healthcare factoring is a true sale of patient and payor receivables to a funder. The funder advances a discounted amount up front, takes assignment of the claims, and is repaid directly by the payor.
Because the receivable is sold rather than pledged, factored claims generally do not appear as debt on the balance sheet, which can preserve covenant capacity on senior facilities.
When it fits
Healthcare factoring fits providers with consistent billing operations and predictable payor performance who need to smooth the lag between service delivery and payor remittance.
It is commonly used during census growth, payor onboarding, transitions in revenue-cycle management, and post-acquisition integration.
See how this structure is used in practice.
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