“Our experience with First American has been fantastic, they took the time to get to know us both as a company and as individuals – but it was still a very quick process.”
-John Murray, Corporate Controller Loretto Health and Rehab Center
Smooth cash flow is imperative for providers to create more flexibility and allow them to respond to changing dynamics. Several providers find cash reimbursement to be a very effective approach in nurturing cash flow. In a cash reimbursement, the lessee sells the equipment to a lessor and the lessor reimburses the lessee for that equipment. The lessee can then continue using the equipment and use the cash for other purposes such as business growth, debt reduction, and strengthening cash position on the balance sheet.
Benefits of Cash Reimbursement:
- Maintain debt ratings
- Avoid bank covenant violations
- Improve liquidity ratios
- Consolidate capital acqusitions onto one lease
5 Ways Providers are Leveraging a Cash Reimbursemet:
- Debt Reduction
- Cash Position
- Capex Budget
Most providers have some type of growth initiative. A cash reimbursement can help fuel those initiatives. Furthermore, it can put cash back on the books to help their organizations accomplish their goals. Having cash back on the books helps reduce debt and can strengthen the cash position on the balance sheet. By replenishing capital expenditure budgets, providers can have funds for strategic priorities.
"Many of my clients have used our cash back reimbursement solution as a tool to hlep their balance sheet at the end of the year when they have spent more than expected."
– Kimberly Moore, Vice President
First American Healthcare Finance
Interested in learning more? View our infographic.