Unlike cash and letters of credit, surety bonds do not tie up the healthcare organization’s resources. This helps provide additional liquidity to the organization. Cash and bank borrowing can be used for other purposes such as growth and funding operations.
Surety Bonds are stable and do not fluctuate with interest rates. Surety bonds are very attractive when interest rates are high and competitive when rates are lower. Regardless of the economic environment, surety bond costs allow the organization or predict their costs.
Claims are rare in healthcare but can occur. Should this happen, surety bond companies employ experts who can help the organization navigate the process and to make sure the claim is legitimate. Generally, cash and letters of credit are swept immediately and the organization will have to go through costly litigation to make any recovery.
Many healthcare organizations typically have surety bond needs. While some are more specialized, a few are common across many health organizations. These include license bonds, lease bonds and insurance deductible bonds.
Almost every healthcare organization needs license bonds. Licensing is required for almost all of the healthcare fields in every state and nationally. Many of these licenses require a license bond to guarantee that the organization or professional will uphold the law and terms of their license. These bonds are very easy to obtain, inexpensive and low risk.
While some organizations own their equipment and property, many healthcare organizations choose to lease instead. Often, leases require a financial guarantee in the form of cash, letter of credit or lease bonds. These bonds guarantee the terms and payment of the lease. Lease bonds can be an excellent way to free up cash and liquidity for health organizations leasing property and equipment.
Many healthcare organizations such as hospitals and doctor groups are large and choose to self insurance all or a portion of their risk. These self insurance programs require the organization to guarantee the payment of a deductible through a financial guarantee such as a deductible bond or letter of credit. Insurance deductible bonds are generally a better choice to allow the organization to maintain its cash and borrowing.
Many healthcare organizations including hospitals, pharmacies, private practices, surgery centers, skilled nursing, home healthcare and large medical groups can benefit from surety bonds. Reach out to the healthcare professionals at Axcess Surety to learn how we can help your organization grow by freeing up resources and providing creative solutions for growth. Contact us today.
Axcess Surety is the premier provider of surety bonds nationally. We work individuals and businesses across the country to provide the best surety bond programs at the best price.
