Three Rx's

For the living organism, the lack of sufficient oxygen prevents growth and absence of it threatens survival. Metaphorically this is important because capital is business oxygen. Insufficient capital prevents growth and development and capital absence dooms business to failure. The metaphor ends there, because oxygen is readily available and accessible to the living organism. Capital, on the other hand, must be acquired.

Obviously, a business requires working capital to fund manufacturing, supplies, overhead and general day to day functioning. "Growth" capital is required to finance development of the business whether the plan is to increase the number of accounts, add additional products or purchase new equipment. Regardless of the reason or need, there are only three prescriptions (Rx) to satisfy your capital requirements: raise equity, acquire debt or sell assets.

Equity financing involves the sale of ownership to outsiders willing to invest in the business. Debt financing is the second Rx. To obtain debt, you are selling your businesses and/or your personal creditworthiness. The lender calculates both business and your creditworthiness which determines whether the loan is made, and the cost (interest rate) of the loan. Rx three is selling assets to raise capital. This is a less traditional, but equally effective method of raising capital. Some conclude, incorrectly, that this method requires selling hard assets such as equipment or furniture. Fortunately, that is not required. The only asset that a company can sell and still remain in business is accounts receivable.

Medical Accounts Receivable (MAR) funding uses the laziest asset owned by a medical practitioner. Becoming aware of such utility can bolster a medical practice or medical services business to new growth and profitability.