Alleon Healthcare Capital (“Alleon”), a specialty finance company focused on providing healthcare accounts receivable financing, medical accounts receivable factoring, and cash flow solutions to medical providers in the U.S., recently closed a $1,500,000 medical accounts receivable factoring facility with a home infusion pharmacy in New Jersey (“Company”).

The Company was established in 2017 and specializes in the provision of superior quality and innovative methods of infusion therapy in patient’s homes. Providing infusion therapy for patients in their homes is more convenient for patients than remaining in the hospital, therefore it is also more cost effective.

The Company approached Alleon seeking factoring for its health insurance accounts receivable to avoid the cash position short fall attributed to the timeline from wholesale purchase to insurance remittance.  The Company currently purchases infusion drugs from wholesalers and within the last year there has been a supply issue, so as the drug becomes available the Company purchases two months of product in advance to fill the 10,000 grams a month it currently uses. Terms with the Company’s suppliers are 30 days, so by the time it collects on the insurance claim for the first month of pre-purchased drug the invoice from the supplier is due, creating a cash shortfall.  The Company wanted to use the receivables  to alleviate the cash crunch.

Having the cash in advance will give the Company the freedom to:

  1. Order quickly and efficiently as drugs become available.
  2. Take advantage of early pay discounts with wholesalers.
  3. Accept new business to continue growth.

The factoring facility was made up of medical receivables that are billed to commercial insurance carriers with an advance rate of up to 80%.

“We were able to structure the transaction so that our client could take advantage of growth opportunities and early pay discounts. These discounts offset the cost of factoring so it was a win-win for all,” said Ben Rutkevitz, V.P. of Business Development at Alleon.

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