Healthcare Asset-Based Lending

In asset-based lending, the lender sizes the loan to a borrowing base, often a percentage of eligible receivables, and advances funds against it. The provider repays the loan with interest over time. Because it is borrowing, the outstanding balance is a liability on the provider's books, and the receivables remain the provider's, pledged as security.

The lien is the defining feature. Lenders frequently file a blanket lien, a UCC-1 covering substantially all business assets, not just the receivables in the borrowing base. That lien can reach equipment, deposit accounts, and other collateral, and it can complicate any future borrowing or sale because it sits ahead of later claims.

The breadth of the lien and the fact that the arrangement is a loan are what distinguish asset-based lending from selling the receivables. The provider still owns the assets, still owes the money, and has encumbered far more than the receivables themselves.

For a practice owner, a blanket lien is the part to watch. Borrowing against your receivables can add a liability and a lien that reaches well beyond the claims you meant to use, tying up equipment and accounts you did not intend to pledge. That can block a future loan or sale, so it is worth knowing exactly what the lien covers before you sign.

Copay does not lend to you and does not take a blanket lien on your business. Copay purchases your eligible insurance claims outright and files a UCC-1 on those purchased receivables only, which records the sale and does not encumber your equipment, accounts, or other assets. There is no loan, no interest, and no personal guarantee, and you are paid the next business day.

See Copay's receivables purchase.