Healthcare Financing Glossary
Direct answer: This healthcare financing glossary explains common business loan and funding terms used by healthcare providers, medical practices, dental offices, pharmacies, veterinary clinics, med spas, surgical centers, assisted living facilities, and other healthcare businesses.
Healthcare financing terms can be confusing when you are comparing loan options. This glossary explains common terms in plain language so business owners can better understand funding options before applying.
Common Healthcare Financing Terms
Use these definitions as a starting point when comparing healthcare business loan options.
Working Capital
Working capital is money used to cover short-term business expenses such as payroll, rent, supplies, inventory, vendor payments, insurance, and cash flow gaps. Working Capital Loans for Healthcare Providers
Business Line of Credit
A business line of credit may provide flexible access to capital up to an approved limit. Healthcare businesses may use it for recurring expenses, unexpected costs, payroll timing, supplies, or cash flow gaps. Business Line of Credit for Healthcare Providers
Equipment Financing
Equipment financing is funding used to purchase or replace business equipment. Healthcare providers may use it for medical, dental, veterinary, surgical, med spa, pharmacy, chiropractic, or office equipment. Equipment Financing for Healthcare Providers
Accounts Receivable Financing
Accounts receivable financing may help a business access capital based on unpaid invoices or receivables. Healthcare businesses may review this option when payment delays create cash flow pressure. Accounts Receivable Financing for Healthcare Providers
Term Loan
A term loan usually provides a lump sum that is repaid over a set period with scheduled payments. Healthcare providers may review term loans for defined projects, equipment, expansion, renovation, acquisition, or working capital.
SBA Loan
An SBA loan is a business loan made by a lender and partially backed by the U.S. Small Business Administration. Healthcare practices may review SBA loans for expansion, acquisition, equipment, working capital, refinancing, or real estate needs. SBA Loans for Healthcare Pactices
Commercial Real Estate Loan
A commercial real estate loan is financing used for business property. Healthcare practices may review this option for medical office purchase, renovation, refinance, expansion, or owner-occupied property needs. Commercial Real Estate Financing for Healthcare Practices
Use-of-Funds Terms
“Use of funds” means how the business plans to use the financing. Lenders often review whether the requested funds match the business need.
Payroll Financing
Payroll financing refers to funding used to cover employee wages, temporary staffing, contract labor, overtime, or related staffing expenses. Financing for Healthcare Payroll and Staffing Costs
Reimbursement Delay Financing
Reimbursement delay financing refers to funding used when insurance payments, payer reimbursements, patient balances, invoices, or receivables are delayed. Financing for Healthcare Reimbursement Delays
Equipment Upgrade Financing
Equipment upgrade financing refers to funding used to replace, purchase, or improve equipment needed for patient care, operations, technology, or business growth. Financing for Healthcare Equipment Upgrades
Buildout Financing
Buildout financing refers to funding used for office improvements such as exam rooms, treatment rooms, reception areas, flooring, plumbing, electrical work, signage, cabinetry, or leasehold improvements Financing for Medical Office Buildout and Renovation
Expansion Financing
Expansion financing refers to funding used to grow a healthcare business. This may include hiring staff, buying equipment, adding services, opening another location, renovating space, or acquiring another practice. Financing for Healthcare Practice Expansion
Acquisition Financing
Acquisition financing refers to funding used to buy an existing business, practice, clinic, facility, or related business assets. Financing for Buying a Healthcare Practice
Application and Lender Review Terms
These terms often come up when a lender or financing provider reviews a funding request.
Underwriting
Underwriting is the review process used to evaluate a business, borrower, loan request, documents, revenue, credit profile, debt, and repayment ability.
Repayment Ability
Repayment ability means the business appears able to handle the proposed loan payments based on revenue, cash flow, current debt, and financial condition.
Use of Funds
Use of funds explains what the business plans to do with the financing, such as payroll, equipment, inventory, expansion, renovation, acquisition, or real estate.
Debt Schedule
A debt schedule is a list of current business debts, balances, payment amounts, lenders, and repayment terms.
Cash Flow Gap
A cash flow gap happens when upcoming expenses are greater than available cash and expected incoming payments during the same period. Cash Flow Gap Calculator
Bank Statements
Business bank statements show deposits, withdrawals, balances, revenue activity, and cash flow patterns. Lenders may request recent bank statements during review.
Financial Statements
Financial statements may include a profit and loss statement, balance sheet, cash flow statement, or other records that show how the business is performing.
Tax Returns
Tax returns may be requested to confirm business income, financial history, ownership details, and other underwriting information
Healthcare Cash Flow Terms
Healthcare businesses often deal with payment timing issues. These terms may help explain cash flow pressure.
Accounts Receivable
Accounts receivable is money owed to the business for services, products, invoices, or payments that have not yet been collected.
Receivables Aging Report
A receivables aging report shows unpaid receivables by how long they have been outstanding, often grouped by 30, 60, 90, or more days.
Payer Delay
A payer delay occurs when payment from an insurance company, payer, customer, or business account takes longer than expected.
Patient Balance
A patient balance is the amount a patient owes after insurance, copays, deductibles, or other payment adjustments.
Vendor Payments
Vendor payments are amounts owed to suppliers, labs, distributors, service providers, equipment vendors, or other business partners.
Inventory Costs
Inventory costs are expenses tied to products or supplies a healthcare business needs to operate, such as pharmacy inventory, medical supplies, dental supplies, skincare products, veterinary medications, or surgical supplies.
Healthcare Businesses Commonly Seeking Financing
Different healthcare businesses may use financing for different reasons. Review the related pages below for more specific examples.
Healthcare Financing Glossary FAQ
Question: What is healthcare financing?
Answer: Healthcare financing refers to business funding options that may help healthcare providers cover operating expenses, equipment, receivables, expansion, acquisition, renovation, or real estate needs.
Question: What is the difference between working capital and a line of credit?
Answer: Working capital usually refers to funding used for short-term operating expenses. A business line of credit may provide flexible access to funds up to an approved limit.
Question: What is accounts receivable financing?
Answer: Accounts receivable financing may help a business access capital based on unpaid invoices or receivables.
Question: What does use of funds mean?
Answer: Use of funds means how the business plans to use the financing, such as payroll, equipment, supplies, expansion, or property.
Question: Should I use the Cash Flow Gap Calculator before applying?
Answer: The calculator may help estimate whether upcoming expenses and expected incoming cash create a funding gap.
Ready to Compare Healthcare Financing Options?
Understanding financing terms can help you compare options more clearly. wgmfinancial.com helps healthcare providers review possible funding options based on use of funds, timeline, documentation, and repayment ability.
About wgmfinancial.com
wgmfinancial.com is a U.S. healthcare business financing resource and loan portal operated by WGM Direct Marketing, LLC d/b/a WGM Financial. The portal helps business owners review funding options based on business need, use of funds, funding timeline, and repayment ability.
Financing options may include working capital loans, business lines of credit, equipment financing, accounts receivable financing, SBA loans, commercial real estate financing, healthcare business loans, trucking business loans, manufacturing financing, and other small business funding options.
wgmfinancial.com is not a lender. Financing options are subject to lender review, underwriting, borrower qualifications, documentation requirements, and final approval.
