Medical and dental practices
Practice financing around the reimbursement lag
A practice does the work, submits the claim, and waits. Payment rules allow 30 to 60 days before a clean claim has to be paid, and denials add weeks on top. Meanwhile payroll, equipment and rent run on the calendar.
How do medical and dental practices finance operations and equipment?
Three instruments fit the reimbursement cycle. Invoice and receivables financing ($20,000 to $25,000,000, interest from 6%, up to 36 months) advances against billed claims rather than waiting out the payer. Equipment financing covers the full purchase amount of clinical equipment at interest from 5% over 1 to 5 years, with the equipment as collateral. A business line of credit ($10,000 to $2,000,000, from 1% per month) smooths payroll across the lag. For speed, a working capital loan funds same day to 48 hours. Minimum: 6 months operating, ~$10,000 monthly revenue, 500 FICO.
The lag is structural, not administrative
Federal rules set the outer bound. Medicare Advantage organisations must pay 95% of clean claims within 30 days for private fee-for-service enrollees, and other claims from non-contracted providers must be paid or denied within 60 calendar days.3 Those are ceilings, not targets, and they apply to claims that are already clean.
The volume of claims that are not clean is the part that hurts. The American Hospital Association reports that 50% of hospitals and health systems have more than $100 million in unpaid claims over six months old, amounting to more than $6.4 billion in delayed or denied claims among surveyed facilities; pending legislation would tighten the in-network clean-claim deadline to 14 days.4 Smaller practices face the same mechanics without the balance sheet to absorb them.
This is precisely the shape of problem receivables financing exists for. You are not short of revenue; you are short of it now. Borrowing against billed claims converts a timing problem into a cost problem you can price, which is usually cheaper than a revenue-based advance sized to the same gap.
What 2026 reimbursement does to the maths
For physicians, the 2026 Medicare Physician Fee Schedule raises the conversion factor by 3.77% for qualifying Advanced APM participants and 3.26% for everyone else — built from a 2.5% temporary congressional increase and MACRA baseline updates, net of a -2.5% efficiency adjustment to work RVUs. CMS itself projects practice costs will grow 2.7% over the same period.1 The longer arc is harsher: adjusted for inflation, Medicare physician payment has effectively declined 33% from 2001 to 2025.2
Dentistry faces the same scissors from the other side. Since January 2021, dental equipment and supply prices rose 23% and staff wages rose 23%, while reimbursement rates rose only 19%, against 27% general inflation.5 Capacity is not the constraint: a quarter of dentists report insufficient busyness, the average new-patient wait is 13.9 days, and 91.7% of recruiting dentists call hygienist recruitment very or extremely challenging.5
The practical reading for a financing decision: if reimbursement is growing slower than your cost base, financing should be aimed at capacity or efficiency — equipment that shortens a procedure, a hire that fills a schedule — rather than at repeatedly bridging the same monthly gap.
Which product fits which problem
| The problem | Product | Terms |
|---|---|---|
| Claims billed, payment 30 to 60 days out | Invoice and receivables financing | $20K – $25M, from 6%, up to 36 months |
| Imaging, chairs, lasers, sterilisation | Equipment financing | Full purchase amount, from 5%, 1 to 5 years |
| Payroll across the reimbursement cycle | Business line of credit | $10K – $2M, from 1% / month, draw and repay |
| Urgent repair or short-notice cost | Working capital loan | $5K – $1M, factor rate from 1.08, same-day approval |
| Buying in, expanding, or a new site | Term loan or SBA | Longer terms, lower rates; SBA needs 2 years and 680+ FICO |
What a practice needs to qualify
- 6 months in operation and roughly $10,000 a month in revenue for revenue-based products
- 500 FICO for an advance or working capital loan; 575+ for a line of credit
- For receivables financing: billed claims to commercial payers or government programmes
- Business bank statements Typically 3 months; some states require 4.
- Government-issued photo ID and a voided business check
About five minutes to apply, soft pull only, no fee and no obligation.
Common questions
Can a practice borrow against unpaid insurance claims?
Yes. Invoice and receivables financing advances against billed claims on facilities from $20,000 to $25,000,000 at interest from 6% over terms up to 36 months. It is usually cheaper than a revenue-based advance for the same gap, because the receivable itself is what secures it.
How long can a payer legally take to pay a clean claim?
Under 42 CFR 422.520, Medicare Advantage organisations must pay 95% of clean claims within 30 days for private fee-for-service enrollees, and other claims from non-contracted providers must be paid or denied within 60 calendar days. Commercial payer terms vary by contract and state prompt-pay law.
What equipment can be financed?
Clinical and practice equipment generally, with the equipment itself as collateral, which is why interest starts around 5% and approval is wider than for unsecured products. Financing covers the full purchase amount over 1 to 5 years.
Does a practice need strong personal credit?
Less than for unsecured financing. Equipment financing leans on the asset and receivables financing leans on the payer, so both are available with weaker personal credit. Revenue-based products accept scores from 500 with 6 months of history.
Is an SBA loan a realistic option for buying into a practice?
It can be, and it is usually the cheapest structure for an acquisition because of the term length. It requires 2 years in business, $200,000+ annual revenue, a 680 credit score and no bankruptcies or outstanding collections, and takes 30 to 60 days to fund.
Sources
- What to expect from the 2026 Medicare Physician Fee Schedule — American Medical Association, 11 December 2025
- Medicare physician pay has plummeted since 2001 — American Medical Association, 21 April 2025
- 42 CFR 422.520, prompt payment by Medicare Advantage organizations — Cornell Legal Information Institute
- Fact Sheet: Prompt Payment Standards in Medicare Advantage — American Hospital Association, 27 May 2026
- The State of the U.S. Dental Economy, Q2 2026 update — American Dental Association Health Policy Institute
See what you qualify for
One application, about five minutes, soft pull only. A funding specialist comes back with the offers you qualify for — and explains every term before you sign.