Insurance pays your practice 30 to 90 days after treatment. How do you fund payroll and a new associate in the gap?

Dental and medical reimbursements typically land 30 to 60 days after a claim is submitted, and 90 is not unusual for a complex claim or a slow payer. In between, the hygienist, the front desk, the lab and the supplier are all paid on time. A practice that is fully booked can be structurally short by an amount equal to a month or two of collections, permanently, and that is not a sign of anything wrong. It is the business model.

Banks know this and lend to practices readily, which is why a practice is one of the few small businesses on this site that is rarely declined. The question is not whether you can be funded. It is which shape fits a gap that never fully closes.

A business line of credit is drawn when payroll is due and the claims are still pending, and repaid when the reimbursements land two weeks later. It costs interest only on what is drawn for the days it is drawn, and nothing at all in the months the timing works out. For a gap that recurs every month, it is the only product that is not paying for money you do not need most of the time.

Practices qualify for lines more easily than most businesses: payer deposits are visible, steady and boring, which is exactly what a line underwriter is looking for. Two years of returns and clean statements is the usual bar, and a practice owner's personal credit is usually strong.

A working capital loan is the fallback if a line is out of reach for time-in-business reasons: a fixed amount in one to three business days, repaid over months. It solves the same problem more expensively, and it is the right answer for a one-time gap rather than a recurring one.

An associate dentist or a mid-level provider is commonly a six-figure first-year commitment in salary and benefits, and their schedule fills over 60 to 90 days while the practice pays them from day one. The ramp is a known, dated cost with a known payoff — which is exactly what a term working capital loan is for.

Size it to the ramp: three months of the associate's cost minus the collections you realistically expect them to generate in each month. Fund that, on the practice's existing deposits, and let the new schedule repay it. Putting the ramp on the line of credit works too, but leaves less room for the reimbursement gap the line was meant for.

Six to twelve months of statements, a payer mix summary if you have one, the aging report on outstanding claims, and — for the associate — the offer letter and a simple three-month ramp projection. An underwriter who can see $80,000 of claims outstanding next to a $40,000 request is not being asked to take a view. They are being asked to bridge a receivable.