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Business loans for home healthcare services

How to get funding for your company when insurance claims take forever.


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Paying for healthcare in America is complicated for everyone — there’s insurance companies to deal with, government benefits to handle and copays to collect. Keeping your home healthcare service running while you wait for insurance claims to come through might mean you need regular financing.

Beyond that, there’s equipment to buy, staff to hire and other costs that come with maintaining and expanding your business. We take you through what you need to know about getting the funds you need to keep things running smoothly.

What loan options are available for home healthcare services?

Your home healthcare service might benefit the most from financing designed to help with cashflow gaps. But you might want to check out other loan types if you’re looking for funding to hire new staff, a new vehicle or update your equipment. Let’s take a look at your options.

  • Line of credit.This option gives yourbusiness access to a credit limitthat it can withdraw from as it needs — like a credit card with lower rates and higher monthly repayments. You can use it for any legitimate business expense — like if you want to create a website or attend a trade show to market your business — and can find bothsecured and unsecured options.
  • Equipment financing.Home healthcare services can find loans specifically designed to cover the cost of software, imaging, radiation therapy equipment and other devices necessary for your business. They also often come with leasing options, if you have a patient that needs a unique piece of equipment.
  • Auto loan.Need a van to transport patients or equipment? Buying a vehicle comes with a slightly different process than most loans, so you might want to look into business vehicle loans.
  • Commercial real estate financing.Need a new office — or want to expand the one you’re already in? This type of financing can walk you through the process of getting a new place.
  • Fixed-term loan.Have any large one-time expense on the horizon that isn’t covered by other loan types? You might just need a good old-fashioned business term loan. These come in a lump sum that you pay back plus interest fees over a set period of time, usually one to five years. You can use it for any legitimate business expense, like purchasing billing and scheduling software or hiring certified nurses for staff training.
  • Invoice financing.Here, your business canborrow against those outstanding invoiceswhile patients and insurance companies argue over the bill. You typically pay it back as your invoices come in, though there may be a minimum monthly repayment plus an advance fee of 2% to 5%.
  • Invoice factoring.Rather than borrowing against your invoices, this option allows you tosell them to a third partyfor a percentage of the amount owed. It’ll take care of your loans from there and you won’t have to deal with the insurance companies or patients anymore. Healthcare providers might also want to look for medical receivables factoring or account receivables factoring.

Can I get invoice financing on Medicare and Medicaid payments?

Not usually. The process for getting an advance on Medicare and Medicaid payments is a little different than other types of invoice factoring or financing. That’s because Medicaid and Medicare typically don’t allow healthcare providers to sell a claim to a third party, meaning you can’t put a pending invoice up for collateral.

You do have a couple of options if your home healthcare service has patients enrolled in either of these programs. First, you can take out a line of credit, which doesn’t require business invoices as collateral.

Or, you can change your bank account to a sweep account — also sometimes called a managed account. A sweep account allows your factoring or financing company to access the account while it stays in your name. Why does this work? Medicare and Medicaid can only make payments to the provider. If the account’s still in the company’s name, it doesn’t care what you do with the funds after it makes a payment.

Compare business loan options for home healthcare services

Data indicated here is updated regularly
Name Product Filter Values Loan amount APR Requirements
BHG business loans
$20,000 – $500,000
Starting at 6.99%
660+ credit score, no bankruptcies in the past year, licensed professional
Flexible financing for licensed professionals.
Lendio business loans
$500 – $5,000,000
Starting at 6%
Operate business in US or Canada, have a business bank account, 560+ personal credit score
Submit one simple application to potentially get offers from a network of over 300 legit business lenders.
Credibly business loans
$5,000 – $250,000
6+ months in business, $180K annual business revenue, 500+ credit $15K+ in monthly deposits
Funding to cover business expenses with daily or weekly repayments.
ROK Financial business loans
$10,000 – $5,000,000
Starting at 6%
Eligibility criteria 3+ months in business, $15,000+ in monthly gross sales or $180,000+ in annual sales
A connection service for all types of businesses — even startups.

Compare up to 4 providers

What common business expenses can I cover with financing?

  • Overhead costs.Payroll, marketing, transportation, medical supplies — you need these things to run your business and they cost money. Money you might not have when an insurance claim takes 90 days to go through.
  • Equipment.Like everything else healthcare related, medical equipment is expensive. A medical equipment loan or lease can make paying for it a lot easier.
  • Vehicles.Auto financing can help you cover the cost of a van, car or any other vehicle your home healthcare business needs.
  • Buying or expanding an office.Commercial real estate financing can help your business buy, lease or expand your home healthcare service’s office.
  • Consolidating debt.If your business is already paying off several debts, then you might want to consider moving them to one loan — ideally with more favorable rates and terms.

What will I need to apply?

While it depends on the type of financing you’re looking for, lenders typically ask for the following information and documents at a minimum:

  • Your personal information.Business owners are typically required to provide their name, contact information and Social Security number when applying for any business loan.
  • Government-issued ID.Lenders also ask to see the business owner’s driver’s license or state ID.
  • A voided check.Use a check from the business bank account you want to receive and repay the funds through.
  • Outstanding invoices.This one generally only applies to accounts receivable financing.
  • Bank statements.Lenders often ask to see the last three months of your business’s bank statements to get an idea of your current cash flow.
  • Your credit score.While some lenders ask foryour business’s credit score, most rely onyour personal credit score.
  • A business plan.Typically banks and credit unionslike to see a business planwhen you apply for funds. Online lenders sometimes ask to see one too, especially if you’re running a young business.

What challenges might I face getting financing for my home healthcare business?

When it comes to getting business financing, main challenge for home healthcare services can be the bookkeeping. You’re keeping track of invoices coming from insurance companies, patients and the government. If your patients pay with both cash and credit cards, this can make things even more complicated.

To improve your chances of getting approved, make sure your bookkeeping is spotless, regardless of what type of loan you’re applying for. You might want to consider using accounting software or even hiring an accountant to keep track of all your payments.

Home healthcare services can also have difficulty getting approved for term loans — which include most real estate, vehicle and equipment loans — if you don’t have a steady cash flow coming into your bank account. In this case, you might want to find ways to cover your costs with an option like accounts receivable financing.

5 tips to expand your home healthcare service

We gathered some business advice from Home Care Pulse, the home healthcare industry’s leading firm in satisfaction research and quality assurance, that could help you take your home healthcare service to the next level:

  1. Get involved in your community.This can mean anything from 5Ks, setting up a booth at the local farmer’s market or getting involved in any annual or regular community events. This helps put a face to your company and make your service’s name the first that comes to mind when your neighbors need home healthcare.
  2. Partner with other agencies.This might sound counterintuitive, but partnering with other agencies can actually help your business. You can buy supplies together to get greater discounts and refer each other patients the other partner can’t take on.
  3. Branch out your advertising.All of your money in online ads? Consider paying for a billboard or radio ad. By advertising in as many different mediums as you can, you’ll expand your audience.
  4. Take advantage of social media.Post on social media regularly and try to tell a story that people will be compelled to watch — even if they know it’s sponsored content.
  5. Know thy competition.Look at the other home healthcare providers in your area and try to find their weak points. If they don’t offer a certain service, offer it. If they have an incentive program, make a better one.

Bottom line

The fact is that most home healthcare services will need financing at some point. Invoice factoring and financing can help your business cover its bases, while other, larger loans can help your business pay for one-time expenses. Want to learn more about business loans?Check out our guideto learn how it all works and compare lenders.

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