CASE STUDY:
Factoring for the Non-Emergency Medical Transportation (NEMT)
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Factoring Information
Client Overview
Company: SafeRide Services
Location: Charlotte, NC
Industry: Non-Emergency Medical Transportation (NEMT)
Annual Revenue: $10 million
Fleet Size: 20 vehicles
Background
SafeRide Services provides reliable transportation for patients requiring non-emergency medical appointments, including dialysis, physical therapy, and routine check-ups between facilities. The company contracts with acute care facilities, senior living facilities, and rehabilitation centers, often experiencing slow payments. While business demand grew, delayed payments created cash flow challenges, impacting SafeRide’s ability to cover payroll, fuel, maintenance, and fleet expansion costs.
Challenges
- Delayed Payments: Extended payment cycles from facilities strained cash flow.
- Operational Costs: Rising fuel prices, maintenance, and increased insurance expenses required consistent working capital.
- Growth Constraints: The company had opportunities to expand routes and contracts but lacked the upfront capital to scale operations.
- Payroll Pressure: Ensuring timely payroll for drivers and staff was a constant concern due to cash flow gaps.
Solution
SafeRide partnered with Gateway Commercial Finance, a leading invoice factoring solution provider familiar with the NEMT industry. By leveraging their quality unpaid invoices, SafeRide gained immediate access to working capital, ensuring steady working capital to support long-term growth.
Factoring Process
- Invoice Submission: SafeRide submitted weekly invoices worth $200,000 to Gateway.
- Advance Funding: Within 24 hours from submission, SafeRide received an (85%) advance on their invoices.
- Balance Payment: Once the facilities paid the invoices (typically within 75 days) Gateway released the remaining 15% (minus a small factoring fee).
Results & Impact after six months
“Partnering with Gateway transformed our business over the past year. We no longer stress over late payments, and our drivers always pay on time. Growing our fleet and securing major contracts has been a game-changer for our company’s future.” — Chris Larson, CEO of SafeRide NEMT Services
- Sustained Cash Flow Stability: Over the year, SafeRide maintained consistent cash flow, ensuring timely payroll, covering operational expenses, and reducing financial stress.
- Fleet Expansion: SafeRide expanded its fleet from 13 to 17 vehicles, allowing the company to service more clients and increase route coverage.
- Revenue Growth: The company secured multiple long-term contracts with large long-term care facilities, increasing annual revenue by nearly 15%.
- Operational Efficiency: With a steady cash flow, SafeRide invested in better scheduling and dispatch software, geo-locating for better customer service and invoicing while reducing downtime and improving service efficiency.
- Employee Retention: Timely payroll and improved working conditions led to higher driver retention rates and overall staff satisfaction.
- Preparedness for Future Opportunities: With reliable funding, SafeRide is now positioned to pursue larger contracts and explore additional markets.
Conclusion
Factoring provided SafeRide Services the financial flexibility to navigate payment delays and operational costs over the long term. By turning unpaid invoices into immediate cash, SafeRide stabilized its operations, supported growth, and improved service delivery. After a year of factoring, the company is thriving and is well-positioned for continued success. Invoice factoring remains a valuable solution for NEMT companies facing similar cash flow challenges.
Learn more about this service
Contact Gateway Commercial Finance Today:
Learn how invoice factoring can help your NEMT business thrive. Call 1-855-424-2955 or contact a decision-maker for more information.