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Article: Financing maneuvers: two opportunities to boost a hospital's working capital. (factoring and asset-backed securities)(Special Report)
- Article from:
- Healthcare Financial Management
- Article date:
- October 1, 1991
- Author:
CopyrightCOPYRIGHT 1991 Healthcare Financial Management Association. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Spiraling expenses, declining profits, and continued cutbacks from third-party payers increasingly limit a healthcare facility's access to capital. As a result, only a small percentage of the approximately 6,700 hospitals in the marketplace have obtained investment grade credit ratings. Current trends in the market suggest that, while investment grade status not only is difficult to achieve and increasingly difficult to maintain, it remains criticafor acquiring capital financing.
Commercial banks are the traditional source of working capital across most industries and provide short-term financing opprotunities for hospitals. When a hospital obtains working ...