Most medical practices that feel short of cash are profitable. The problem is timing: payroll, rent and supplies are due now, while insurance reimbursements for work already done arrive thirty to ninety days later. The fix is a funding structure matched to that rhythm, not a bigger loan.
Diagnose the gap before funding it
Look at four months of statements the way an underwriter would: when money arrives, when it leaves, and how low the balance dips between. If the dips are rhythmic — every payroll, every quarter — the gap is structural and a revolving facility fits. If it was one bad quarter, a one-off top-up may be all that is needed.
Funding the wrong shape is the common mistake: a lump sum for a recurring gap runs out and leaves a payment behind.
The structures that fit
A business line of credit is built for the reimbursement gap: draw when payroll lands before the insurer pays, repay when the reimbursement arrives, pay only on what was drawn.
Factoring can work where receivables are billed to institutions on terms. And a one-off pressure — a tax bill, a fit-out overrun — suits simple working capital with a known end date.
What makes the file strong
Practices carry two advantages into underwriting: income that arrives on insurer schedules, and demand that does not swing with the economy. Keep the account out of overdraft — negative days weigh more than most owners expect — and route everything through the business account so the deposits are visible.
Our guide to what underwriters read in bank statements covers exactly what gets weighed.
What not to do
Stacking short-term advances to cover a structural gap compounds the squeeze: each fixed payment shrinks the cash the next month. If repayments are already eating the float, consolidation or a restructure is usually the better conversation than another advance — and it is a conversation worth having early, not late.
Read next: Medical practice funding · Business line of credit · Dental practice funding
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