Is my problem timing or collections?
Answer this first, because financing only fixes timing. A timing gap means claims are clean and will pay, just later than payroll. A collections problem means claims are denied, underpaid, stuck for missing information or written off. Borrowing against a collections problem adds cost without bringing the money in. Your accounts receivable aging report shows which you have.
Look at A/R by payer and by age bucket. If most balances are recent and clear on schedule, it is timing. If older buckets keep growing, or one payer's balances stall, dig into denials and resubmissions before borrowing. Track your own days-to-payment by payer rather than relying on averages, because payment times vary by payer, claim type and accuracy.
What financing covers a claims gap?
A line of credit fits recurring gaps: draw when deposits lag, repay when payments post. Working capital fits a single, defined shortfall, such as a backlog after a payer system problem. Some owners also compare receivables-based financing for eligible commercial claims. Each has different costs, so match the product to how often the gap happens.
- Line of credit: usually the lowest-cost choice for gaps that repeat, since you pay only on what you draw
- Working capital: a lump sum for a one-time, known-size gap
- Receivables-based financing: an alternative some owners compare. Government program receivables carry federal assignment restrictions, so these products typically focus on commercial claims. Confirm the rules with the official agency and your advisors.
How can a practice shorten the gap without borrowing?
Many practices free up cash by tightening the revenue cycle. Verify eligibility and benefits before visits, collect patient portions at the time of service, submit claims quickly and cleanly, enroll in electronic payments and remittance with each payer, and work denials within days rather than weeks. Each step shortens the wait between the visit and the deposit.
Watch for common delays: missing authorizations, outdated patient insurance, coding errors that trigger denials, and batches of claims held for signatures. A billing company or system switch can also slow claims for a period, which is worth planning for with a cushion. Billing questions belong with your billing advisors; MedicalBizFunding does not give billing advice.
How much should a practice borrow for claims timing?
Size it to the gap, not the maximum offer. Estimate the difference between what goes out and what comes in during your slowest weeks, multiply by how long those weeks last, and add a modest cushion. For recurring gaps, a line with that limit is usually enough. Borrowing more just adds cost and payment pressure.
A practical method: take the last six months of weekly deposits and weekly payroll, rent and supply costs. Find the worst run of consecutive short weeks and total the shortfall. That number, plus a cushion, is a reasonable starting point for a line of credit limit.
What do funders review for a claims-gap request?
Funders typically review recent bank statements, monthly collections, accounts receivable totals by payer category and the owner's credit. Requirements vary by product and funder; many look at time in business, monthly revenue and credit. An aging report showing balances that clear on schedule helps prove the gap is timing, which makes the request easier to approve.
Export totals only. Never send patient names, account numbers tied to patients or any patient information. See the document checklist and what funders review.
When is borrowing the wrong move?
Do not borrow when denials are rising, a payer has cut rates below your costs, or the practice runs short every month regardless of timing. In those cases the balance only grows. Also be careful with stacking short-term products that each take a daily or weekly payment, because uneven insurance deposits make fixed payments hard to cover.
If your practice already has an advance and its payment is squeezing payroll, ask about options to lower your payment and stretch the term instead of adding another. Then fix the underlying billing issues so the practice is not in the same spot next quarter.
Frequently asked questions
How long do insurance claims take to pay?
It varies by payer, claim type, how the claim was submitted and whether it was complete. Rather than relying on published averages, track your own days-to-payment by payer from your billing reports. That gives you a realistic number to plan cash flow and size any financing.
Line of credit or lump sum for a claims gap?
A line usually fits recurring timing gaps because you draw only what you need and repay as payments post. A lump sum of working capital fits a one-time gap with a known size, such as a backlog after a payer or system problem.
Can I borrow against my insurance receivables?
Some funders consider eligible commercial-payer receivables. Government program receivables carry federal assignment restrictions, so they are treated differently. Many practices find a line of credit based on collections history simpler. Confirm the rules with the official agency and your own advisors.
What should I share with a funder?
Bank statements, monthly collections totals and accounts receivable aging totals by payer category. Remove anything that identifies a patient. No funder needs patient names, charts or claim-level patient details to review a practice.
Will a payer delay hurt my chances of approval?
Not necessarily. Funders understand that practices face payer delays. What helps is showing that collections were steady before the delay and that the pending balances are clean claims expected to pay. A clear explanation of the cause makes the file easier to read.
Payroll due before payments arrive?
Apply online and tell us about the gap your practice is covering.
Updated September 14, 2026 · MedicalBizFunding Team