Understanding how refinancing works is a key tool in your arsenal for business growth. Here are some key points that can help you understand the process and how to leverage refinancing for your advantage.
How Refinancing Works: A refinance involves the re-evaluation of a person or business's credit terms and credit status. Consumer loans typically considered for refinancing include mortgage loans, car loans, and student loans. Business investors may also seek to refinance mortgage loans on commercial properties. Many business investors will also evaluate their corporate balance sheets for business loans issued by creditors that could benefit from lower market rates or an improved credit profile. Refinancing occurs when a person or business changes the interest rate, payback schedule, and terms of an already existent agreement. Understanding Refinance: The current rate environment is typically a key catalyst for loan refinancing. Other factors that trigger a refinance can be an improved credit profile or a change in long-term financial plans. KEY TAKEAWAYS: A refinance occurs when a previous loan has been revised in terms of the interest rate, payment schedule, and terms. A refinance involves the re-evaluation of a person or business's credit terms and credit status. Consumer loans often considered for refinancing include mortgage loans, car loans, and student loans. A common goal is to pay less interest over the life of the loan. Borrowers may also want to change the duration of the loan or switch from a fixed-rate to an adjustable-rate mortgage, or vice versa. Types of Refinance Loans: There are several different types of refinancing options. The type of loan a borrower decides on depends on the needs of the borrower. Rate-and-term refinancing: The most common type of refinancing is called the rate-and-term. This occurs when the original loan is paid and replaced with a new loan requiring lower interest payments. Cash-out refinancing: Cash-outs are common when the underlying asset collateralizing the loan increases in value. The transaction involves withdrawing the value or equity in the asset in exchange for a higher loan amount. In other words, when an asset increases in value on paper, you can gain access to that value with a loan rather than by selling it. This option increases the total loan amount but gives the borrower access to cash immediately while still maintaining ownership of the asset. Cash-in refinancing: The cash-in refinance allows the borrower to pay down some portion of the loan for a lower loan-to-value ratio or smaller loan payments. Consolidation refinancing: In some cases, a consolidation loan may be an effective way to refinance. A consolidation refinancing can be used when an investor obtains a single loan at a rate that is lower than their current average interest rate across several credit products. This type of refinancing requires the consumer or business to apply for a new loan at a lower rate and then pay off existing debt with the new loan, leaving their total outstanding principal with substantially lower interest rate payments. Special Considerations for Refinance: Interest rate environments are cyclical and as such are followed closely by consumers and businesses for new credit as well as credit refinancing. National monetary policy, economic cycle, and market competition can be key factors causing interest rates to increase or decrease for consumers and businesses. During economic valleys, interest rates may be lowered to help stimulate consumer spending and business investment. Economies in an expansion will typically see interest rates rising as the economy improves. These factors can influence interest rates across all types of credit products including both non-revolving loans and revolving credit cards. In a rising rate environment debtors with floating-interest-rate products can expect to see their interest rates automatically increased and vice versa with a decreasing rate environment. Like to learn more? Speak to a refinance specialist. Schedule your free consultation today at:---->https://live.vcita.com/site/fundingdocs or start your refinaning process now at:---->https://www.fundingdocs.com/apply-now.html Of course the dominating trend over the last 20+ years has been hospital systems employing doctors and buying practices. However many sources including MGMA and Modern Healthcare have reported that hospital systems lose approximately $150,000 to $200,000 yearly per employed physician. Recent changes to outpatient hospital payments, such as the elimination of facility reimbursement, have added to hospital’s problems. To stem these losses, productivity demands and salary reductions are placed on providers, increasing dissatisfaction, burnout and defections. While new medical school graduates have little choice but employment, physicians further along in their careers are eyeing independent practice. But there’s precious little if any instruction given in school about the complexities of medical entrepreneurship. One of those seldom understood and potentially devastating pitfalls is insurance network contracting, commonly referred to as “credentialing”. Establishment of new federal tax ID (TID) and group national provider identifier (NPI) are first steps in starting a practice. Assuming a provider has been seeing Medicare and Medicaid patients, adding the new TID and NPI to the “straight” government programs is fairly simple. Address, phone number and other basic info will be required as well. However, other carriers require new contracts for the new practice. Most patients choose a commercial Medicaid intermediary or a Medicare Advantage plan to increase accessibility and lower cost. Therein lies the challenge. As an example; if you see a Medicaid eligible patient that’s designated United Healthcare as their carrier and you are not in the UHC network, even if you are an enrolled Medicaid provider, you will NOT be paid. You can’t bill the patient or Medicaid directly. In commercial carrier situations, “out of network” payments to the provider are lower, patient deductibles are predominantly higher and some plans have no out of network benefits at all. Some providers opt to stay out of network and not treat those with government benefits, but that’s another topic. Securing in-network status requires submission of ones curriculum vitae, references, employment history, attestation to any malpractice findings, and more – on specified forms, and following the protocols that each carrier demands. They are all different. Simplifying the process is the Counsel for Affordable Quality Healthcare (CAQH) database. Enter the required information once in CAQH and when you grant permission many carriers will use it for much, but not all, information they require. But applying is not enough. Follow up on the applications is required and each carrier has their own time frame to accept or deny. Allow 120 to 180 days prior to treating patients for commercial carriers and the government coverage plans they offer to grant you network status. Do NOT see Medicaid patients that have designated a network before your in-network status is granted if you wish to be paid. They will NOT back date your network acceptance. Different from commercial, “straight” Medicare and Medicaid will pay for services commencing with the date they received an application. They do however enforce a limited time frame for responding to errors in the application, at which point the application date and effective date may be pushed back. Like to learn more? Speak to an experienced credentialing and revenue cycle management advisor today. Contact Craig Evans at: 1(262) 490-0911 Precision Healthcare Consulting LLC. www.precisionhealthcareconsulting.com cevans@precisionhealthcareconsulting.com FundingDocs LLC went on a mission dedicated to solely helping our healthcare entrepreneur colleagues' grow their business enterprises. Our primary goal, to educate our colleagues by providing free business growth advisory sessions that prepared them for their future goals and helping them lay out the business road map needed to reach their current growth aspirations. Ensuring their needs are met today and tomorrow to maximize bottom line profits.
During this process we always come across one command factor, when it was time for a institutional or a private capital injection either for a start up project or anywhere else in the development stage. Only 1 out of 10 healthcare entrepreneurs actually were prepared and understood what will be required of them from a bank or lending institution, which inspired me to write this article. I hope that all entrepreneurs reading this article can have a better understanding of what a lender will be looking for to determine if your business will be a good investment. Its plain and simple, the main question any investor, bank or private lending institution will be asking themselves will be, (Is this a good fit for our organization and can this business make us money with interest). That's its, that's the bottom line. 9 out of 10 entrepreneurs get denied for the funding they needed, because they were not prepared to prove their financial worthiness by providing the required information in an accurate and timely manner, and ended up losing the interest of that lending organization or person. Here is a list of basic items you'll need to be prepared to have before locating capital and why. 1). A short 1-2 page business summary with projections showing, what, why and where a capital investment will impact your business development and industry market. Why: You're pre-answering business questions and showing a lender how you're going to use their money to service the loan given and make more profit. 2). At least 2-3 years business and personal tax returns. Why: Because you're proving you have a financial history and you're validating you can pay the loan back and/or make more money. 3). Be prepared to fill out an application and a personal financial statement, that will ask you several business and personal financial questions. Why: Setting time aside to ensure you're providing accurate information before hand speeds up the process of review and accuracy of your application. Which will be used by a lender to determine if your request is a good fit for their portfolio. 4). Be honest and accurate about your business and finances in your application. Why: Because all the information you provide to a lender will be highly scrutinized and verified, and if its not accurate you will be denied automatically, which will leave a negative mark on your credit history. I hope this information helps. Thank you. Samuel Pagan. CEO & Founder. FundingDocs LLC Need to speak to a healthcare business development specialist? Lets talk! Click here to schedule your free consultation. https://live.vcita.com/site/fundingdocs FundingDocs has changed the traditional business model of Healthcare lending and they continue to innovate and simplify the process for medical, dental and veterinarian providers in need of capital.
FundingDocs' innovative platform eliminates both the healthcare provider's need for referrals and the time-consuming research to find suitable funding solutions. Often times healthcare provider's encounter entities and individuals that often do not meet the healthcare providers financing needs, waste precious time, and tie providers to a lockdown periods without the ability to seek other funding options. FundingDocs' Bidding System, allows transparency and availability of capital. FundingDocs' specializes in bringing healthcare providers in direct contact with capital lenders from across the nation to provide multiple offer scenarios for loans and credit lines, for practice expansions, refinancing, partner buyouts, new equipment and working capital. Some of FundingDocs benefits and programs:
No matter what stage you’re in, from healthcare startup, to expansion, to exit, the biggest challenge you’ll face as a healthcare entrepreneur trying to acquire capital is preparing yourself with the right knowledge and connections. FundingDocs network of Medical and Dental industry experts along with their knowledge of the underwriting process allows them to bring you tailored solutions that help you navigate the funding process seamlessly and get on with your growth plans. Find out what programs are available for your healthcare practice: Click button below to start your process. The key word here is ‘efficiency.’ The industrial Revolution introduced a new era of production manufacturing, and paved the path to innovation. The introduction of the first intelligent data (computer) was in 1939 and the first automation system was in 1949. So this is not new. It just took us a few decades to realize its importance for fear of job loss. During the evolution of intelligent data, and its introduction it was often debated whether there would be job loss. But that was never the case, what it did instead was broaden our perspectives on what ‘quality of life’ was, our standard of living, and introduced new skills and job titles. A good example of this of the times changing perspectives was shown during the release of a 1957 film ‘Desk Set’ starring Spencer Tracy and Katherine Hepburn. The story line was: a television network plans to introduce a computer into their library research department, their librarians jump to the conclusion they are being replaced,- when in reality its being brought in to alleviate their work load.. Since that film debuted, our technology has gone leaps and bounds, beyond what could have been imagined during the 1950’s. Naturally, whenever change happens, employment practices change, restructuring occurs, followed quickly by the introduction of training programs and the introduction of new curriculums in educational institutions. And, with those changes came casualties in employment, but they came because the tide of change had flowed in too quickly for those who were not prepared for change. The positive to this, like any negative, you learn from your mistakes and know what you want and where you want to go with that experience. The untrained became trained, and in many cases better qualified. Employers, who had not been prepared hired qualified agencies that could provide the skills their company had lacked, and implemented new systems, products, and services that created new jobs. Their changes created stronger financial portfolios, some of them becoming leaders on the stock market. The need for competent ‘efficiency’ requiring Automation as the necessary tool to provide that efficiency, as I stated before, is by no means a new tool. It has been used frequently. Where it has not been used is in Healthcare lending dealings…until now with FundingDocs, to create a tailored seamless process for locating capital. by: Samuel Pagan ---------------- Featured LinkedIn Pulse response to: "we're hitting the road to report on the state of work. Tell us: Where should we go?" #FutureOfWork |
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