Recovering Losses ─ Without Scrooge-Like Tactics

lightsDecember is a prime time for recovering losses from non-performing loans and leases. Here is one recovery strategy that’s customer friendly and in keeping with the spirit of the season. This strategy is also good for business, which is why growing numbers of equipment finance companies, banks and online small business lenders are using it.

Reputable commercial debt buyers like our company are buying their charged-off accounts. When we pay, the finance company books it as a recovery. So, it is income for the company, but particularly for the collection department.

When a company is short dollars for either monthly, quarterly or year-end reporting, selling these charged-off accounts brings in revenue to boost the numbers for the collection department. And, the recovery is immediate. Not only does this improve the numbers, it is a big job saver for finance companies.

Some companies sell charged-off accounts to commercial debt buyers in a “forward flow” established relationship. This is guaranteed income for them each month/quarter that they sell. They can also project for the future, knowing how much they will charge off against the agreed upon forward flow purchase price.

Best of all, there is a way to do this that ensures the finance company preserves customer relationships and maintains control over old accounts. Follow this checklist to find a reputable commercial debt buyer for your company.


manager-brett-boehmBrett Boehm is CEO for TBF Financial. He can be reached at,
phone 847-267-0660 or via

3 Reasons Not to ‘Phone It In’ with Industry Events

By Brett Boehm

ELFA Convention Networking

You’re too busy. Budgets are tight. There are professional development resources already available online. These are legitimate reasons to be selective about the industry events you attend. But please do attend, regularly. Better yet, get involved.

I’ve found that the benefits far outweigh the costs. Events I highly recommend for professionals in traditional and alternative finance include the Equipment Leasing and Finance Association (ELFA) annual convention, LEND360 and LendIt.

Business growth, professional growth and personal growth through charitable projects are key reasons for becoming active in industry events. But “being there” can also lead to unpredictable opportunities, like the one that came my way recently.

LEND360 Panel

Business Growth

After committing to LEND360 this year, I decided to make the most of the experience by volunteering for a speaker panel and signing up our company for a sponsorship. Business professionals at the event noticed my company’s involvement and reached out to me using the conference’s networking app. Among them were two C-suite executives from the same organization who expressed interest in my company’s commercial debt-buying services. Before considering a business relationship with my firm, they added, I would need to engage the interest of their CEO.

Fast forward a week later to the ELFA Annual Convention. I’ve been active in it for years. This year I am serving on the association’s membership committee and our business also sponsored one of the educational session rooms during the event.

While talking with a banking professional at the convention, he noticed one of his customers in the crowd and introduced us. “Your name is familiar,” the customer commented. Turns out he was the CEO of the company I was first introduced to at LEND360. Out of 1000+ people attending the ELFA Conference, suddenly I was speaking with the very CEO I had hoped to meet someday.

The value of industry events in business development cannot be overstated. We live in a world where much of our work is conducted online and by phone. Conferences provide a dynamic venue for forming real relationships with business prospects, customers and partners.

I often work in advance of events to set up appointments with key people there. Most conferences provide attendee lists or apps and social media hashtags you can use to make connections. Important networking also takes place on the fly like it did in the serendipitous introduction to my business prospect’s CEO.

LendIt USA 2017

Professional Growth

We can learn so much from professionals outside our company and even outside our industries. Different generations in business can also learn from each other. Conference speakers and exhibitors expand our knowledge and skills in specific ways. With very large events like LendIt that have overlapping sessions, you may have to be strategic in selecting your focus to make the most of your experience.

Harder to quantify are the motivational benefits of attending industry events. Participants often leave conferences reenergized and enthusiastic about the work ahead.

One reason for the large turnout at the ELFA Conference this year undoubtedly was the high quality of the speakers and relevance of the topics. I attended all four sessions in the room our company sponsored at the event, including one geared to millennials in finance. The speakers were engaging and informative.

ELFA Convention charity project

Personal Growth through Charitable Projects

Participating in conferences is one way to “give back” to your industry, which ultimately helps your business, too. Some events take this a step further and give back to the community by incorporating service projects and charitable donations in their activities.

This year, I was excited to participate in and help sponsor one of the ELFA Convention’s three community service projects. We assembled meal kits for families in need including those in hurricane-ravaged Puerto Rico through the charity Feeding Children Everywhere.

I joined with other volunteers at the ELFA Convention to package 20,000 meal kits of dry foods including lentils, rice and dehydrated vegetables. We looked a little funny in our hair nets but had a lot of fun and made a difference. It was a rewarding experience that I will never forget.


You Get What You Give

Occasionally I will overhear someone complaining that a conference was not worth their while. It’s true that you may not land a business deal there. What I can guarantee is that attending industry conferences can help you make important connections and grow professionally and personally.

And, as in most things, you get what you give.

Use industry events as opportunities. Do everything you can to make the conference a productive one for you and your business. Be generous in helping others there, too. Consider becoming really involved in conferences as a volunteer, speaker or sponsor. It will enrich your experience ─ and multiply the benefits.


manager-brett-boehmBrett Boehm is CEO for TBF Financial. He can be reached at, phone 847-267-0660 or via LinkedIn

Commercial Debt Buyers You Can Trust – A Checklist

plantOnce a loan or lease reaches the charge-off stage, many companies sell them to commercial debt buyers. It’s a cost-efficient way to handle non-performing loans and leases that also generates money to fund more lucrative activities within the business. Just make sure the buyer or broker you are considering is a reputable one.

Like every profession, commercial debt buying has its good and its bad. Most commercial debt buyers and their brokers are reputable but a few are unscrupulous, and those few can create major problems for the lenders and lessors who deal with them.

I’ve seen some brokers show around portfolios without having signed non-disclosure agreements (NDAs) with the sellers, and in those cases our company, like other reputable buyers, refused to do business with them. In a few other cases, parts of portfolios have been sold off without the sellers’ consent.

Fortunately, separating the good from the bad is easy. Use this commercial debt checklist to ensure you are dealing with reputable buyers and their brokers.

  • Discuss the commercial debt buyer’s philosophy, collection process, and security procedures. Get references from similar types of sellers.
  • Make sure the buyer will collect debts over time, without using the lender or lessor’s name in a sensitive way when dealing with customers.
  • Ask if the buyer will resell the debt. The answer should be “no.” This means you can repurchase the loans should any issues arise post-sale.
  • Insist that the buyer (and its broker, when applicable) have signed NDAs before providing them with proprietary financial information.
  • When approached by a broker, verify that he/she has an established relationship with a specific buyer and has done business with them recently.
  • Make sure brokers use NDAs to protect all parties’ confidential information and discuss how the broker is going to share portfolio information, who will see it, how the NPLs are going to be collected, and if they could be re-sold at any point. The answer to the last question should be “no.”

Follow these steps and you will find reputable commercial debt buyers and brokers who will turn your non-performing loans and leases into cash.

Preserving Customer Relationships When Pursuing Non-Performing Loans

businessmanRecently I contributed a guest blog for Lend Academy about strategies online small business lenders are using to manage non-performing loans (NPLs). The article discussed the pros and cons of two common strategies: working NPLs in-house indefinitely or turning them over to collection agencies at some point. I called both strategies outdated for newer business models.

It’s true but perhaps a bit harsh. Some companies are simply unfamiliar with a better option, which is managing NPLs in-house until charge-off, then selling them to a reputable commercial debt buyer.

Commercial debt buying is an accepted practice in financial services that is starting to catch on in online lending, too. A leading online small business lender is using it, for example, to earn cash on NPLs that can be poured back into generating revenue-producing loans.

One question I’m often asked is, how does a lender maintain control over accounts and preserve relationships with customers when selling their NPLs to a commercial debt buyer? That’s a fair question. After all, the lender hopes the customer’s finances will turn around someday so they can do business together again.

The answer is to talk to commercial debt buyers before giving them your business, and get their assurances in writing. Reputable buyers will focus on collecting the debts over time, without using the lender’s name and in a sensitive manner. They also won’t resell the debt. That way, a seller can always repurchase the loan from the buyer should any issues arise post-sale.

Learn more about Recovering Non-Performing Loans: Better Options.


manager-brett-boehmBrett Boehm is CEO for TBF Financial. He can be reached at, phone 847-267-0660, Ext. 101 or via LinkedIn

An Online Small Business Lender’s Strategy: Quickly Turn Uncollected Payments into Cash

dollarA leading online small business lender is turning uncollected payments into cash in 24 hours ─ without sacrificing customer relationships. The strategy? TBF Financial, a commercial debt buyer, purchases the company’s non-performing loans on a regular basis so the lender can funnel cash back as quickly as possible into making more loans to small businesses. I have been attending fintech events like LendIt USA and am reaching out to online small business lenders to let them know that this option is available to them, too. Plans are being made for speaking at LEND360 on the topic.

Though TBF’s services are tailored for today’s online lending business models, they are based on a time-proven strategy. Our company has provided similar services to banks and equipment finance companies for almost 20 years. Now we are pioneering commercial debt buying services for online small business lenders just as we once did with the equipment finance industry.

Most online small business lenders I’ve spoken with are aware of only one option for dealing with bad accounts that have not been resolved: continue to handle the transactions indefinitely in-house, and perhaps turn them over to a collections agency eventually.

Lenders handling non-performing loans in-house throughout the life of the account have told me that they are concerned about the inefficiency of chasing bad transactions past a certain time frame. Their business model is focused on speed and on making loans, so at some point it makes sense to partner with a third-party.

On the other hand, some lenders who have eventually turned bad accounts over to collections agencies say that the process is still a lengthy one requiring too much time and overhead for relatively little gain. They are also concerned about losing their relationships with customers in the process, are worried about negative contacts with the customer, and want to maintain the customer’s loyalty in the event their business turns around and they can make more deals in the future.

A Better Option

TBF’s services provide online small business lenders a way to turn unresolved collections into cash while maintaining control over their customer accounts. Lenders we work with value the ease and speed of trading their non-performing loans for immediate cash.

We buy all kinds of non-performing finance products up to 4 years old from the date of last payment. For example, we purchase commercial loans, leases and lines of credit, which have personal guarantees, no personal guarantees, are secured, unsecured, pre-agency, post-agency, pre-litigation, reduced to judgment, etc.

We will work with you on a single engagement, periodic engagements, or establish a forward-flow relationship with your company where you regularly send information on non-performing finance products to us for pricing. Once a lender has a forward-flow relationship with us, it usually takes 24 hours or less to receive payment.

Here’s how it works.

  • Supply TBF with nominal information regarding the pool of non-performing assets to be sold. For example, we will ask for approximate information on the number of accounts in the pool and total of outstanding balances.
  • We value the non-performing assets and provide an offer price. 
  • Lender signs the purchase agreement. 
  • We wire payment. 
  • We work discreetly to collect debts over time without using the lender’s name. The process offers brand protection to the online lender because of our special collections approach and because TBF does not resell the accounts.
  • Regular transactions after that are typically handled online and completed within hours. Some lenders, for example, provide us a monthly list.

This strategy allows online small business lenders to infuse cash back into revenue generating processes while maintaining customer relationships. Their collections professionals, in turn, can focus efforts on resolving accounts that can be recovered more quickly.

manager-brett-boehmBrett Boehm is a principal and director of business development for TBF Financial. He can be reached at, phone 847.267.0600, Ext. 101 or via LinkedIn

Debt Buyer vs Collection Agency: Valuable In$ight.

These days, there are many different types of companies that may be contacting you about your unpaid accounts. After you speak to one, another one calls and then another. In dealing with everyone, you must wonder, why do I keep talking to new people, why do I have to repeat my story, why won’t somebody help me? In order to understand the answers to these and other questions, you must understand who you are dealing with and how they operate.

Let’s start at the beginning. You became personally obligated to a Finance Company (“FC”) who loaned you money and for whatever reason, the money was not paid back in full. They may have contacted you directly, but demanded full payment and would not negotiate. Obviously, you would have paid them if you could, so nothing gets resolved. From there, the FC sends your account to a Collection Agency (“CA”).

A CA is exactly what the name says it is, an agent for the FC for which they try to collect the money due. The CA does not have title to the account and are simply a representative. They are issued the account and given a time period for which they have the opportunity to collect the money. They are granted limited authority to settle the matter without the FC’s approval. If the CA wants to settle for an amount below their authority, they must contact the FC for approval. The CA has limited time to collect and they only get paid a percentage of what they collect. So, their motivation is to get you to pay as much as possible in a short period of time. It is a race against the clock! CAs don’t usually have backup documentation and are simply attempting to sway you to paying them so they can collect a commission. If the account does not get settled with that CA, then it will usually go to another CA with the process starting all over again.

At some point, your account may end up with a Debt Buyer (“DB”). This is a good thing, because there is more settlement flexibility and it is not likely to be sold again soon, if at all. A DB purchases your account and holds title to it. Therefore, they have total authority to settle the matter for any amount and over any time period. DBs generally have access to all of the backup information and your financial standing. They can be reasonable and allow payments over a longer period of time, since they aren’t on a time limit. When the account is purchased, the DB pays based on a discount to what is due. While they pay less than the amount owing, that does not change your obligation on the debt. You are still liable for the full amount, but a DB should be more understanding in how they structure the payback. A DB wants to help you honor the obligation and clear up your credit obligation.

As you can see, there are some distinct differences in the ways Collection Agencies and Debt Buyers operate. Hopefully, should you encounter them in the future, this will give you more insight about handling the situation.

No Respect: Why Charge-Offs are Still Assets

Charged-off commercial paper is the Rodney Dangerfield of your balance sheet: It gets no respect. However, a growing number of lenders are treating their charged-off commercial paper as an asset — and gaining steady returns from selling it.

Few lenders want to have anything to do with their charged-off loans or leases. This is understandable. Often, charge-offs are associated with the failure that led to their non-payment. There’s also a good chance acrimony was involved in collection attempts. Time and resources were spent on the collection process, and it failed.

So there they sit, as a line item or beside an asterisk on the balance sheet, doing nothing to improve the bottom line. If they elicit any reaction from a lender, it’s often a sigh or a frown — or both.

When lenders start treating their charge-offs as assets, many discover one of the easiest ways to convert them into cash and profits is to sell them.

But when lenders start treating their charge-offs as assets, many discover one of the easiest ways to convert them into cash and profits is to sell them. Quite simply, the sale proceeds represent found money and found profits. Those who treat their charged-off commercial paper as an asset and formulate a regular plan for selling it are adding an integral part to their company’s business plan — one that generates revenue from this written-off asset.

I know this firsthand because TBF Financial serves many of the largest companies in the $650 billion equipment finance sector by purchasing their portfolios of small-ticket leases and loans that were uncollected and charged off. Among the first to offer this service when it was founded in 1998, TBF has now streamlined and perfected a simple, easy process that pays sellers cash upfront for accepted pools of charge-offs.

An Easy Asset to Sell

Viewing your charged-off debt as an asset rather than a liability is the first step toward transforming it into cash. Once charge-offs are viewed as assets, lenders find that selling is a very easy process. Here’s how it often works, from start to finish:

1) The lender’s or lessor’s due diligence effort consists of preparing an electronic spreadsheet with minimal information for any charged-off assets for sale. The buyer of the charged-off asset will use this information to perform due diligence on the accounts and develop an offering price for the portfolio. If the price is acceptable to the seller, the transaction will be closed with purchase/sale agreement. The entire transaction, from the time the buyer receives the seller’s spreadsheet until closing, can take no more than one to two weeks depending on the portfolio’s size.

2) If the parties have a forward flow arrangement, no due diligence will be required after the first transaction. The parties will agree on a price for subsequent transactions, and the purchase/sale agreement for the first sale will provide the terms for all subsequent sales. The only document required for each new sale under such an arrangement will be a bill of sale. At the time of each sale, the seller will simply email the buyer a spreadsheet of the accounts it wishes to sell. The buyer will then pay for the charged-off assets by overnighting a check or making a wire transfer of the purchase funds.

3) Upon the first sale, the parties will agree on how the backup documents will be made available to the buyer. Today, most of the documents are stored electronically, and the buyer is either given limited access to the seller’s database or the seller burns the data to a CD or DVD.

The Case for Selling Your Charged-Off Assets

There are many other significant benefits to selling charged-off assets. And, frankly, there are no liabilities. In today’s challenging economic climate, many commercial lenders and lessors are finding themselves under increased pressure to explore every possible source of revenue to enhance their bottom line. It’s hardly surprising, then, that selling charged-off assets is materializing as exactly that hidden resource.

Selling charged-off assets is the easiest way to convert them into revenue and improve cash-flow. Any lender that is seeking ways to improve its bottom line can benefit from the immediate boost gained from selling charged-off leases or written-off loans. Once sellers complete their initial sale of charged-off assets, they often see how easy it is to realize cash, and they are likely to start a proactive arrangement where they automatically sell their charged-off assets, usually monthly or quarterly. The regular revenue from the sales becomes a positive line item in companies’ budgets that they can count on going forward.

Since these assets have been charged off the seller’s ledger as having no value, the purchase price is a “recovery” for accounting purposes; therefore, the total purchase price goes directly to the seller’s bottom line as profit. While many equipment finance companies will do end-of-the-year charged-off assets sales to increase annual profits, an increasing number of lenders and lessors are finding that selling charge-offs throughout the fiscal year provides a steady stream of revenue. For revenue generation, there’s never a better time to sell than the present because charged-off assets don’t appreciate with age.

This strategy of selling charged-off assets as soon as they have been determined uncollectible has the added benefit of removing them from the path that assigns them to a collection agency — a path with its own expenses and risks. Companies that sell their charged-off assets have learned that the purchase price for these assets is more than they are likely to recover by using collection agencies. This allows the sellers to reduce their collections process expenses while generating revenues from an immediate sale of the charged-off asset. Even if the seller decides to wait until after the collection process is complete, there is still plenty of potential to boost profits by selling the charged-off asset at that point.

Another reason some companies are selling charged-off assets is because they are uncomfortable with the uncertainty of using collection agencies. Because of the nature of their legal relationship with the lender or lessor, collection agencies are acting on behalf of, and representing, the owners of the charged-off asset; this means that everything and anything the agencies must do to collect ultimately reflects on the account owners.

Let’s face it: Collections is a business that can get ugly. These days, collection agencies are being more closely monitored, and some are being charged with violations of the law by regulatory authorities for use of illegal collection tactics. The last thing any commercial lender or equipment finance company needs or wants is to be associated with or responsible for any illegal actions taken by the collection agencies they have hired.

Since these assets have been charged off the seller’s ledger as having no value, the purchase price is a “recovery” for accounting purposes; therefore, the total purchase price goes directly to the seller’s bottom line as profit.

Unlike collection agencies, which are essentially agents of the lessor or lender and working under the lessor or lender’s name, the buyer of charged-off assets acts on its own behalf as the title holder to the account. The sale of the portfolio to the buyer is an arms’ length transaction without recourse, so the seller is totally out of the picture going forward.

As added insurance against any such association, buyers of charged-off assets will agree to not resell the asset. With this assurance, the sellers do not have to be concerned that any possible secondary or tertiary buyer of the charged-off asset will do anything that will reflect negatively on the seller.

Therefore, by avoiding the collections process altogether, the seller of a charged-off asset gets the best of both worlds: complete disassociation from the bad debt, while still getting to apply the proceeds of the sale to the bottom line as profit — which has the biggest impact of all.

One final critical distinction between collection agencies and buyers of charged-off assets is worth noting: Unlike collection agencies, which are often motivated to pick only the low-hanging fruit from the accounts they are given, commercial debt buyers are experts at reaching higher by identifying collectible accounts and successfully collecting on them. Because of their expertise at recognizing value, they are able to offer substantial prices for the non-performing accounts they buy — and do so at the point of sale.

Changed Perceptions About Charged-Off Assets

As mentioned earlier, a critical first step for many commercial lenders or lessors is working through the negative perception they have toward the charged-off paper on their balance sheets. Once they view their charged-off assets as just that — assets — potential sellers can see firsthand how the process works by having their charged-off assets evaluated.

It never hurts to get an estimate on their value. Knowing the cash value a buyer will pay for a charged-off asset is the first step toward deciding how to deal with it. Buyers are more than willing to provide potential sellers with an estimate.

The bottom line is we need to give charged-off assets the respect they deserve. Yes, they are most certainly an unconventional “asset,” but establishing a solid plan for liquidation yields significant benefits. Remember, the purchase price a buyer pays is a “recovery” and therefore the total purchase price goes directly to the seller’s bottom line as a profit. In today’s tight market, what commercial lender or lessor can afford to pass up revenue generated, almost literally, from nothing?

Want to impress your boss? Creatively increase profits before year-end!

With less than 2 months left in the 4th quarter, all departments in financial institutions are frantically examining their numbers.  Jobs are at risk should targets not be met.  Odds are, you have been monitoring the progress of those numbers throughout the year and everything is lining up nicely for December 31.  Should you be in charge of the collection department, that may not be the case due to a decline in inventory since cleaning house after the recession.  Or, you may just want to knock the socks off your boss by trying something new that sends profits soaring, crushing goals in an area no one expected.  How could you possibly increase profits, with little effort, the holidays approaching and not much time available?  Sell your charged off commercial paper!

When referring to commercial charge offs, this is the paper that is uncollectable.  It has been cycled through the internal collection department, law offices and multiple agencies.  The accounts are determined dead, collecting dust in a warehouse.  At this point, the institution has determined this paper has no value and wrote its value down to zero.

Here is where selling these delinquent accounts adds value!  TBF Financial will buy these accounts and pay cash at closing.  That cash goes directly to your bottom line as a recovery, INCREASING PROFITS OUT OF NOWHERE!   The transaction can be closed quickly and with little effort by the seller.  The due diligence requirements are minimal and pricing is quick.

The more there is to sell, the more money that can be recovered.  The only requirement is that the paper is non-performing commercial paper!  We buy equipment leases, bank notes and lines of credit, judgments, pre-agency, post agency, foreclosures, secured, unsecured, etc.  As I said, it only needs to be non-performing and commercial.  We even buy paper that is up to 4 years old from the date of default!

Now, how much easier can it be to impress your boss?

Brett Boehm,

Director of Business Development for TBF Financial, LLC