Whether the focus is on treating sports injuries, battling the flu, treating slip-and-falls during the winter, soothing sunburns and other skin problems in the summer — and the list goes on — firms in the healthcare space face demand-related spikes and lulls; just like companies in other industries and sectors, from retail to professional services.
As such, exploiting all revenue and profit potential when demand surges — as well as mitigating and offsetting shortfalls when demand dips — is a critical objective; one that, ultimately, determines whether a healthcare organization thrives or dies. And that’s where a business line of credit is both a ladder to growth and a lifeline to safety.
Below, we highlight the 3 ways that a business line of credit helps manage and control seasonal healthcare cycles:
Covering extra costs during demand surges.
A business line of credit provides healthcare organizations with a source of funds that can be accessed anytime to meet surges in demand by (for example) extending office hours, adding a call center, updating a website (e.g. putting forms online to make the in-office experience more efficient for all involved), and so on. Since the funds are instantly available, there’s no time consuming and costly application process when you do need funding.
Covering temporary shortfalls during demand lulls.
As noted above, a business line of credit is helpful during demand surges. However, it can be even more valuable during off-season lulls, when temporary shortfalls between revenues and overhead costs typically emerge. What’s more, interest is only charged on the amount borrowed — not on the total amount available — and the line is revolving (i.e. paying back borrowed funds means that they become available again).
Covering account receivable gaps.
This last advantage is not linked to demand peaks or valleys. However, it’s necessary to highlight because of an unwelcome — yet unavoidable — fact of life in the healthcare world: many patients (or clinics, practices, hospitals and health networks for those operating in the B2B space) take weeks or months to pay their bill; and some may even fail to settle their account altogether. A business line of credit helps bridge the gap between when services are delivered, and when healthcare organizations receive a check or EFT.
To learn more about how a business line of credit can help your healthcare organization increase revenues and profits during demand surges — and mitigate or offset revenue shortfalls during off-season lulls — contact the National Business Capital team today or fill out our two minute application!
If you’ve had problems getting approved for a bank loan in the past, check out our free eBook “How to Get Business Funding When Banks Say ‘No’”. With the added restrictions banks include in their application process for seasonal businesses, it can be difficult to get the funding you need. That’s why we’ve written an eBook to detail the reason behind a bank’s low approval rating, loan programs available to you and funding options to avoid.