Line of Credit for Medical Doctors

Medical offices are a vital business in our country and doctors these days are seeing more red tape and restrictions as well as ever changing insurance payer rules.

By Matthew Elling
Co-Founder and Consultant at Line of Credit Depot
Updated on February 10, 2021
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Lines of credit are very popular amongst the healthcare provider industry because doctors shoulder most of the patient financial care burden. Simply put, doctors see patients before getting paid from insurance. Today’s physician practices face a lot of challenges as a business model. Keeping your practice financially healthy can be difficult from industry challenges like reduced health insurance reimbursement rates, underinsured patients and staffing shortfalls. Medical offices are a vital business in our country and doctors these days are seeing more red tape and restrictions as well as ever changing insurance payer rules.


When medical practices are looking to apply for a line of credit,  they mostly cite invoicing and accounts receivable delays as their number one reason for applying. The healthcare revenue cycle can be a headache for medical providers, prompting doctor offices to look for outside credit to bridge this gap. 


Reimbursement delays will negatively affect the cash flow for doctor offices. When claims submissions get kicked back from insurance companies, the doctor's office still hasn’t gotten paid. THis can create headaches for the doctor, who, besides seeing patients, has to navigate how to run the business smoothly and balance cash flow with all the other bills associated with the practice, ie; staff salaries, rent, utilities, etc.


Besides delays in A/R, medical practices who receive lines of credit often draw from the line for the following reasons:


-Making Medical Office Payroll


-Office Technology Improvements


-Marketing and Advertising Campaigns


-Medical and Imaging Equipment Purchases


Unforeseen expenses while running a medical practice seem to usually always come up. If there are large fluctuations in patient volume, cash flow challenges can be exacerbated. That’s why successful and fiscally responsible medical practices have a security cash reserve to weather the business ups and downs. They don’t just have cash sitting in an account, but have access to a line of credit that allows them to draw funds as needed. 

If you own or are partnered with a medical practice and wish to learn more about what lines of credit are available please apply here.

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