Sizing a line
Lines of credit are often sized to cover the peak receivables gap plus a cushion. Shortening collections can reduce the amount you need to borrow.
Run the numbers
Patient or customer charges billed per month.
E.g. your line-of-credit rate.
Days to collect today
46 days
Cash freed at 30 days
$61,644
Yearly carrying cost
$16,200
Expected uncollectible
$9,000
Days outstanding = A/R ÷ average daily charges. A simplified view — insurance timing, payment plans and write-off policy all affect real collections.
Estimates only. Results vary. No guarantee of approval, rates or savings.
Estimates only. Results vary. No guarantee of approval, rates or savings.
Talk with a financing specialistCommon questions
Is this the same as a working capital ratio?
No. This estimates cash tied up in collections; the ratio compares current assets with current liabilities.
How much working capital do I need?
Enough to cover payroll and bills through your slowest collection cycle, plus a cushion.
Loan or line?
Recurring gaps usually fit a line; a one-time need may fit a term loan.