Terms of a Healthcare Provider's Revolving Line of Credit

Revolving Line of Credit

Revolving line of credit lets you draw and repay the balance repeatedly over the life of the loan. You may borrow any amount you need up to your available credit limit, and use your eligible accounts receivable to secure the loan. As your receivables are paid, the cash is used to pay down your outstanding loan balance.

Lender's committed lines of credit provide availability based on the net collectible value (reimbursement rate) of a borrower's accounts receivable, typically up to 85% (range: 80% to 90%) against receivable aged up to 180 days (range: 90 to 180 days). Self-Pay receivables are usually excluded. Commitments to these credit facilities range from one to five years (average 3 years). Lender's also includes float days (numbers of days before collections are posted) in the term sheet; the range is typically 2 to 5 days. Lender takes first lien on all accounts receivable.

Pricing on Revolving lines of credit are typically in the range of Libor plus 1.50% - 5.00% (prime rate is also used), depending on the size of the commitment, and credit quality of the borrower. A commitment fee of 0.75 – 2.00% is typical (average is 1.00%).

If you would like to compare Lender's costs; Healthcare Collateral Consulting, LLC can perform a complete analysis of a prospective borrower's proposed RLOC terms and fees. Using the lender's term sheet and historical data for the last 12 to 24 months, HCC can give the prospective borrower insight into the true cost of the revolving line of credit and allow the prospective borrower to test different fee schedule scenarios. HCC can also offer a collateral simulation to determine if the collateral supports the loan balance on any historical month. HCC will then make term sheet recommendations leading to improved cost savings, and/or the ability to obtain additional funds from untapped collateral.

How do you get started?
If you are interested in learning more, or would like to get in touch with Mr. David Lacasse; He can be reached at the following email address: djlacasse@gmail.com . Please included your name, title, company name and phone number where Mr. Lacasse can reach you.

Healthcare Collateral Consulting, LLC
healthcarecollateralconsulting@gmail.com
Fairfield County, Connecticut
203-610-2515