The global home health care industry is expected to grow to $663 billion by 2030. As the population over 65 doubles—on track to outnumber children 18 and younger by 2034—and life expectancy stretches into the upper 80s, there has never been a stronger demand for home health care services.
It isn’t only the elderly making use of these services. A third of patients in need of home health care assistance are under the age of 60, suffering from chronic illnesses and in rehabilitation programs, relying on home health care services such as:
- Non-medical home care
- Hospice and palliative care
- Senior care
- Personal care services
- Physical and occupational therapy
- Speech-language therapy
- Medical social services
- Adult daycare
- Nursing care
- Nutritional care
- Pain management
The fear of COVID-19 has fueled the demand for home health care services as an alternative to living in a nursing home or long-term care facility. The pandemic has also led to the rise of 24/7 telehealth services as a convenient and safe way to serve patients. The added pressure created by this increased demand has resulted in an urgent need for home health care services, presenting an opportunity for existing businesses to improve operations and scale growth quickly.
In order for home health care agencies to grow, third-party financing is often required. SBA loans and bank loans are typically the first option for home health care businesses, but funding can be difficult to access through these sources. With streamlined online applications and more flexible approval requirements than traditional lenders, alternative funding is a fast and easy way to access the funds you need to grow your home health care business, often in as little as one business day.
Read on to learn about 10 ways home health care agencies can use alternative funding to fuel their growth, including:
- Enhancing or developing new home health care services for seniors
- Purchasing equipment, devices, supplies, and technology
- Hiring and training new staff
- Investing in marketing and advertising
- Paying franchising fees, and obtaining licenses, certifications, and other continuing education or professional development skills
- Developing digital solutions to scale your business
- Managing cash flow and payroll during seasonal fluctuations or delayed/denied insurance claims
- Covering unexpected expenses
- Complying with state or federal regulations
- Retaining staff and managing staff shortages
Let’s dig in.
10 Ways Home Health Care Agencies Can Grow Their Business With Alternative Funding
There are no restrictions on how you choose to use the alternative funds for your home health care agency. Here are 10 examples of how you could potentially meet your business goals with alternative financing:
1. Enhance or develop new home health care services for seniors
As new health services become mainstream, home health care providers must expand their current list of offerings to remain competitive in the market. Skilled services that home health care agencies can offer include:
- Infusion therapy
- Nutrition services
- Pain management
- Social work
- Speech therapy
- Physical therapy
- Occupational therapy
- Psychiatric services
- Nursing care
Alternative funding can be used to hire new staff members who are trained in these services, to purchase new equipment needed to offer such services, or invest in training or continued education for existing staff.
2. Purchase home health care equipment, devices, supplies, and technology
The increased adoption of advanced home health care devices—like dialysis machines and blood glucose monitoring devices—has made it possible to receive high-quality care at home. Medical equipment and home health care supplies you may need to provide to your patients include:
- Respiratory devices
- Feeding equipment
- Voiding equipment
- IV equipment
- Infusion pumps
- Dialysis machines
- Hospital beds
- Blood pressure monitors
With alternative funding, you can pay for cutting-edge technology and equipment to provide your home care recipients with the best possible care and service.
3. Hire and train new staff
As demand for home health services grows, your team must expand. Hiring in anticipation of increased workload can help you avoid overworking your current staff due to burnout. Use alternative financing to recruit, source, and hire new talent so you can accept larger contracts and stay ahead of the curve.
4. Invest in marketing and advertising to expand reach
Marketing return on investment (ROI) can be as high as 5:1 or even 10:1, yielding up to $10 for every $1 spent. Using funding to boost your home health care business’s marketing and increase revenue is a great use of alternative small business financing. Use your funding to:
- Revamp your website
- Develop an organic SEO strategy, such as adding a blog or hiring freelance writers
- Launch a social media or Google Ads campaign
- Create a referral program to attract new clients
- Sponsor community events such as vaccination clinics or blood pressure screenings
- Speak at seminars or conferences
- Run ads in the local newspaper
5. Pay franchising fees, and obtain licenses, certifications, and other continuing education or professional development skills
Use alternative funding to cover license renewals, franchise fees, or even cover tuition and the cost of continuing education to keep your staff up-to-date and relevant in today’s ever-changing market.
In most states (except Iowa, Michigan, Massachusetts, and Ohio), home health care businesses require a license to operate. The cost to obtain and renew licenses can put a strain on your business’s cash flow. The associated costs for franchising can also become prohibitive with an initial franchising fee of up to $40,000 and a total initial investment of up to $400,000, which does not include renewal fees and royalties.
Continuing education for your staff can also come with a high price tag, but is critical for providing the best possible care to your patients, including offering new services.
6. Develop digital solutions to scale your business
Improve overall efficiencies by automating business processes to enable your team to focus on their work rather than admin tasks. With alternative funding, you can invest in technology to help streamline simple day-to-day operations, such as online payment processing and patient visit scheduling. You can also use alternative funding to automate financial reporting to keep an eye on revenue and analyze cash flow at any time.
In addition to streamlining your operations, digital solutions can help improve patient care. For example, you could:
- Implement a secure HIPAA-compliant teleconferencing tool to share sensitive health-related information
- Develop tools to remotely monitor patients’ vital signs and send emergency alerts as needed
- Create a secure mobile app to send medication reminders
7. Manage cash flow and payroll during seasonal fluctuations or delayed/denied insurance claims
Second only to providing excellent care to your patients, maintaining steady cash flow is one of the most critical aspects of running your home health care business. Don’t let a slow season or delayed Medicare or Medicaid insurance claims stop you from growing your business. Bridging financial gaps with alternative funding allows you to focus on patient care without the stress of limited cash flow.
8. Cover unexpected expenses
Sometimes the unpredictable happens—equipment breaks down, employees leave, and new regulations arise. Prepare for the unexpected with alternative financing and never again worry about covering surprise expenses.
9. Comply with state or federal regulations
As minimum health and safety regulations are constantly improving, it’s critical that you ensure your home health services are always compliant with state and federal regulations. Use your alternative funding to pay for coverage requirements such as liability insurance and workers’ compensation.
10. Retain staff and manage staff shortages
Retaining staff is one of the most prominent pain points for home health care providers, especially as businesses emerge from COVID-19 lockdowns and face ongoing restrictions. Avoid wasted time spent hiring and training new personnel by keeping your employees happy with fair wages and promotions for outstanding performance.
Home health agencies can also use alternative funding to hire temporary staff. This can be a helpful option when there is a sudden increase in patient volume or if there is an unexpected staff shortage.
Alternative Funding for Home Health Care Businesses
Home health care agencies can apply for four main types of alternative funding, each with different qualifications and factor rates. We recommend speaking with one of our Funding Advisors to select the best option for your home health care agency.
Here’s a quick overview of the most popular alternative funding options for home health care businesses:
1. Merchant cash advances
A merchant cash advance gives you immediate working capital in exchange for a percentage of your daily credit and debit card sales. Unlike a traditional term loan, which is repaid in monthly installments, payments for merchant cash advances are deducted automatically from your daily or weekly credit and debit card sales.
Since MCA funding is based on your projected future sales, this option is ideal for agencies with lower credit scores or who might not otherwise meet the strict financial requirements of the SBA and other traditional lenders.
2. Invoice factoring
Invoice factoring is a financing solution whereby an alternative lender will advance up to 90% of the value of your outstanding invoices in exchange for immediate cash. This form of funding is ideal for home health care agencies with at least $15,000 in outstanding invoices and maximum payment terms of 30 to 90 days. Usually, Medicare and Medicaid payments will not qualify as they do not let you sell a claim to a third party.
3. Collateral working capital
Collateral working capital is a secured form of financing that uses commercial real estate (not a primary residence) as collateral to reduce the risk to the lender. With this added collateral, home health care agencies may be approved for a higher loan amount than other forms of alternative funding.
4. Business line of credit
A business line of credit is a beneficial alternative to a fixed-term bank loan. You can borrow as little or as much as needed and only pay monthly interest on the amount you use—not the entire credit limit extended to you like traditional term loans.
Is Alternative Funding Right for Your Home Health Care Business?
The home health care industry is growing, presenting businesses with opportunities to expand. Alternative funding can help fuel this growth by providing the working capital needed to invest in strategies like proactive hiring, increased marketing, or purchasing new equipment.
Greenbox Capital provides unrestricted funding for home health care providers in the USA and Canada with $3,000 to $500,000 in as little as one business day. The application process is quick and easy. Simply fill out an online form and submit at least three months of bank statements. A Funding Advisor will then reach out to you within the hour to discuss your funding options and finish your application. Once approved, you could receive up to $500,000 in as little as 24 hours.
Give your patients the care they deserve. Apply online today for alternative funding with Greenbox Capital and scale your home health care business.