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COVID Test Centres Lack Liquidity – How to Bridge the Funding Gap

One so-called “Schnelltest” per person per week – that is the promise the federal government of Germany made. It is also an integral part of the opening strategy. Over a short period, hundreds of private test centres have opened to meet the newly created need for testing. However, these private providers will not be paid out until May at the earliest. For some, this will be too late.

01. April 2021
Zoe Schirren - B2B Fintech Expert
Picture: Medakit Ltd, Unsplash

Testing, testing, testing…

Since 8th March 2021, according to the federal-state decision of March 3, 2021, every resident of Germany has been entitled to one free COVID-19 “Schnelltest” per week. Following a “the more, the better” strategy, testing asymptomatic citizens is intended to prevent a further lockdown as it helps to detect and interrupt infection chains.

Testing asymptomatic people is also an integral part of the opening strategy. A negative test result is now necessary in many places, for example, to be able to visit an exhibition or to go shopping for non-essentials. Within a very short time, the demand for testing has increased enormously.

These tests can be carried out by doctors, pharmacists and designated test centres. In Berlin alone, more than 150 of those private test centres have opened within only two weeks.

But conducting the masses of free tests – theoretically 82 million per week (on top of the other self-paid tests and tests based on symptoms) – is not only a major logistical challenge,  but also a financial one.

Who pays for all the testing – and when?

While the federal government is supposed to pay through the Association of Statutory Health Insurance Physicians (Kassenärztliche Vereinigung or KV), a lack of transparency in communication has led to uncertainty among providers.

Most recently, the KV in Berlin stated that it would not be able to pay until May – at the earliest. Also in other federal states, payments for the tests are still outstanding. At this point, it is still unclear when exactly the private providers will receive payout for the testing, and the test centres are reaching their limits in liquidity. Some are conducting fewer tests due to uncertainty or unstable cash flow. Others are even considering closure.

To handle the large demand for testing and ensure that testing capacity can be fully utilised this funding gap must be closed.

How do test centres close the funding gap?

For a company to obtain traditional funding, several criteria must typically be met. The company needs to have existed for a minimum period of time for example; therefore, young companies have significantly fewer financing options available to them.

By their nature, COVID-19 test centres are only a few weeks to months old. Hence, they are denied most financing through traditional providers. At Billie, we put all of our efforts into helping these young companies bridge the financing gap through factoring.

What is Factoring?

Factoring is a form of financing that gives businesses access to quick liquidity by selling their outstanding receivables in exchange for immediate payment.

We have adapted our underwriting to the specific conditions and needs of test centres to support them in their cash flow – successfully so. Billie has already been able to buy account receivables from the first Berlin test centres and pay them out within only one day. This shortens the waiting time for the centres by more than 30 days and thus secures their existence.

Factoring with Billie Flow at a glance:

  • Payout within 24 hours

  • Digital submission of outstanding receivables

  • Fast, secure, and no bureaucracy

  • Personal consulting service

We would like to help you, too

If you operate a test centre yourself and are interested in financing assistance through factoring, please feel free to book an appointment, and we will call you.

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