Insurance money is safe - but slow.
A Tier-2 city multi-specialty hospital was growing fast - but TPA claims took 45–90 days while salaries needed paying on the 1st. It had both a cash-flow problem and a growth opportunity that required funding at the same time.
Illustrative, representative case - not a verified individual client file. Company identities, figures and locations have been changed to protect confidentiality. Outcomes depend on lender appraisal and are not commitments.
A multi-specialty hospital in a Tier-2 city. ~₹90 crore turnover. Promoted by a clinician-entrepreneur with a large share of revenue from insurance/TPA and government health-scheme patients - the kind of institutional billing that signals stability.
Two problems arrived at once: a liquidity crunch in the present and a growth opportunity on the horizon.
TPA and scheme claims settled in 45–90 days. Salaries, consumables, and pharmacy payments ran near-cash.
That gap - institutional receivables that were slow but real - was bleeding the monthly cash position. At the same time, the hospital had a credible plan to add a new wing and equipment worth ~₹15 crore.
Existing limits covered neither the receivable gap nor the capex.
Two distinct needs. Two distinct solutions.
TPA and government-scheme receivables are high-quality - they don't default, they just take time. The right instrument is an OD against those receivables: draw when the gap opens, repay when the claims settle.
The wing expansion was different - long gestation, specific assets, a multi-year payback. That needed a term loan sized to projected incremental cash flows and DSCR, not working capital.
Conflating the two into one facility would have either under-funded the expansion or over-leveraged the operations.
₹10 crore OD against verified TPA/scheme receivables - drawing power pegged to the assigned claims book.
₹15 crore term loan over 7–8 years for the new wing and equipment, secured against the expansion assets and property collateral.
Pricing at repo + ~3–3.5%. Placed with a private bank running a dedicated healthcare desk - one that understood claim-realisation timelines.
We prepared a project report with occupancy and ARPOB projections, DSCR workings, and a detailed ageing of TPA claims to support the OD's drawing power.
The bank queried claim-rejection rates. We evidenced a low historical rejection ratio and formally assigned the claims.
Sanction: ~10 weeks. The extra time was legal and documentation-driven, not credit-driven.
The OD smoothed monthly liquidity - the first-of-the-month payroll risk disappeared.
The term loan funded the new wing. Bed capacity grew. Over two years, turnover moved toward ~₹120 crore.
Claim realisation, now actively managed, fell from ~75 days to ~50.
"We could finally grow the hospital without gambling the payroll."
- Promoter, Healthcare
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