hospitals, medical groups, private practitioners and other providers in a perilous
position. Cumbersome and bureaucratic third party billing systems with long time-
to-collection waiting periods have resulted in inconsistent cash flows and limited
capital for growth. Nationwide, two-thirds of physicians work in practices that are
set up as small business. Payment cuts 18% over four years, together with soaring
malpractice premiums and other overhead costs, have threatened to put such
practices out of businesses. More than 50% of doctors have deferred plans to
purchase much-needed new equipment, and 30% either have laid off staff or are
planning layoffs in the near future.

What Factoring "Is Not:"

• A Loan - Factoring is the sale of your medical claims for services already
delivered

• Offered By Banks - Factoring is not an asset-based loan, nor is it a debt facility
similar to those offered by banks.

Why not simply pick up the phone and call a bank for a loan to get through the
crisis? Many of you already tried that and have been surprised to find that the
average practice may not have sufficient credit and assets with which to secure
adequate working capital. Additionally, the traditional banking loan application and
approval process is long and involved. Debt is created for the practice to repay, and
personal guarantees are required. The practice becomes less desirable for resale or
acquisition.

Unlike bank lines that can tie up all of your assets, factoring involves only your third
party medical claims

• No collateral other than accounts receivables

• No financial guarantees

• Unlimited amount of dollars

Factoring provides working capital without adding debt to your balance sheet. There
is no predetermined maximum limit. This working capital arrangement is not limited
in amount as many bank products are nor is it subject to banking "regulations."

Surveys of physicians have identified the following immediate needs:

The creation of solid dependable cash flow

Decrease in the reimbursement interval between the time service is provided and
payment is received

Increase in the overall percentage of claims collected

Reduction in administrative costs

Ready availability of cash for new equipment, expansion of office space, the addition
of new partners, and practice marketing

This “wish list” would be complete if access to this working capital could be created
debt-free. The physician practice would then have the financial freedom to focus on
business growth and patient satisfaction, instead of focusing on how to meet the
next payroll or malpractice premium payment. Is such a solution possible?
Fortunately, the answer is YES!

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