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Do you own a growing business that needs financing? If you are like most business owners, whenever your business needs money you head over to the bank. Unfortunately, as most small business owners soon find out, most banks do not lend money to businesses

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

unless they have significant collateral and a history of successful operations. This presents quite a challenge for business owners.

When banks are not an option, small business owners turn to what is known as the alternative financing funding market. Al

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

though the financing options discussed in this article fall under the alternative financing category, they are actually quite widely used and should be considered mainstream. Most major companies (including public companies) have used this alternative fin

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

ncing at one time or another during their growth history.

Most of the tools described in this article can only be used by businesses that are already in operation, and whose main requirement is working capital. Although startups can benefit from these to

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

ols, the companies will need to be in operation for a little while and have a growing list of clients.

General Invoice Factoring

Invoice factoring (also known as accounts receivable factoring) is ideal for business owners who cannot aff

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

rd to wait 30 to 90 days to get paid by their clients. It allows a business to sell invoices from commercial customers to a financing company for immediate payment. The financing company buys the invoices at a discount and waits for the customer to pay.

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

The main advantage of factoring your invoices is that the financing company makes its decision using the credit of the payer, rather than yours. That means that if you own a small company that is doing business with a large credit worthy company, you are

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

lmost certain to have the transaction approved. Another advantage of factoring is that it does not have set limits like lines of credit.. The level of financing is limited only by the amount you sell to credit worthy clients. General factors can work with

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

most industries, although there are two main industry subspecialties – freight bill factoring and medical factoring.

Freight Bill Invoice Factoring

Trucking companies tend to be very cash hungry businesses. The owners need money

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

o pay their drivers, pay gasoline and pay suppliers. However, most trucking companies also work with a high volume of freight invoices from credit worthy clients. That makes freight bill factoring an ideal solution for their cash flow issues. Just like in

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

general factoring, the factoring company buys the freight invoices from the trucking company for immediate cash.. Furthermore, the risk for these types of transactions is lower than in general factoring. This means that trucking companies can qualify for

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

preferential financing terms.

Medical Factoring

Most medical industry businesses (doctor’s offices, hospitals, medical testing centers and medical supply companies) make the bulk of their earnings by billing 3rd party insurance c

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

mpanies, Medicare and Medicaid. Unfortunately, insurance companies are notorious for paying their invoices in 30 to 90 days, creating cash flow problems at the medical office. Factoring medical offices is a subspecialty of general factoring. Given the com

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

plexities of the insurance industry, it usually requires the participation of a factoring company with extensive industry experience.

Generally speaking, the medical factoring company will provide you with financing based on your NET collectables rather

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

hen your gross collectables. They will also need to be part of the billing process, to ensure that they finance the right amounts. Due to its complexity, medical factoring is only accessible to medical businesses making at least $100,000 a month. However,

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

if your business qualifies for it, you will find that it is a great tool to streamline your cash flow and grow.

Purchase Order Funding

Most distributors and import/export companies tend to be very cash hungry businesses, in part becaus

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

of how the sales process works. Usually, the process starts when the distributor gets a purchase order (PO) from a client. They then purchase the items from their supplier, who then drop ships it to the end customer. This works well as long as the compan

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

y has enough money to pay the suppliers and wait for their clients to pay for the product. However, sometimes a payment can take up to 60 or 90 days to arrive, creating a big cash flow challenge for the distributor. Other times, the company may become too

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

successful and get a purchase order that is too big for them to finance. In these instances, the company should consider purchase order funding financing. With PO financing, a finance company handles your supplier payments and ensures that the goods are p

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

roperly delivered. Once the client pays for the product, the transaction is settled and all parties are paid. PO funding is a product that truly allows you to grow your company – sometimes exponentially – while using someone else’s money

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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