More Fintech Lenders Pursuing Debt Sales

In 2019 we are experiencing a marked uptick in alternative lenders who are interested in selling off their non-performing loans (NPLs). The benefits are clear. But why the increased interest, now? There are at least two reasons: online lending is maturing; and potential sellers are reassured once they learn how reputable buyers manage the accounts after sell-off.

A Maturing Industry

The fintech industry is maturing. Evidence of this includes the number of sizable investments taking place this year, as reported recently by Lend Academy. Online lenders are a segment of the industry that is growing, too. They are booking more deals, and, over time, a percentage invariably default and reach the charge-off stage.

Selling NPLs allows fintech lenders to speed up collections by concentrating internal talent on more productive pursuits. They also earn immediate cash for their charge-offs. Banks and equipment finance companies have been selling non-performing paper to commercial debt buying services for years and it is an accepted finance practice. Now online small business lenders are learning about this strategy.

I expect LendIt Fintech USA, which is coming up soon, will reveal more signs of a maturing industry. It should also be noted that alternative lenders are willing to finance higher risk borrowers than traditional finance companies do – yet another reason for a commercial debt buying partner.

Account Control Assurances

Many fintech lenders we talk with say it is important for them to know how their NPLs will be managed after sell-off. They want debtors to be dealt with diplomatically. They also want the option of buying back a single account if they mistakenly sell it. Once lenders find a commercial debt buyer who can assure them of this, they are eager to do business.

Not all commercial debt buyers or their brokers offer this protection, so it is important to work only with ones who do. This checklist for finding commercial debt buyers you can trust is helpful for evaluating potential partners.

We’ll recap the main takeaways in the next section.

First Comes Due Diligence

All industries have their good and bad players, and commercial debt buying is no different. Separating the two is a simple enough matter, though. Asking the right questions will ensure you are dealing with a reputable buyer or broker.

  • What are the commercial debt buyer’s philosophy, collection process, and security procedures?
  • Can the buyer provide references from similar types of sellers? The answer should be yes.
  • Will the buyer collect debts over time, in a sensitive way when dealing with customers, and without representing themselves as the lender? The answer should be yes.
  • Will the buyer resell the debt? The answer should be no. This allows lenders to buy back their loans should any issues arise post-sale.
  • Will the buyer, and its broker when applicable, sign a non-disclosure agreement (NDA)? Make sure they have done so before providing any proprietary financial information.
  • For brokers: can you show evidence of an established relationship with a specific buyer and have you done business with that buyer recently? The answer should be yes.
  • For brokers:  do you use NDAs to protect all parties’ confidential information? Again, the answer should be yes.
  • For brokers: how will you share portfolio information, who will see it, and how will the NPLs be collected?  Could the NPLs be re-sold at any point? The answer to the last question should be no.

How It Works

Here are answers to frequently asked questions and a run-down of how commercial debt buying and selling process works.

What kinds of commercial debt can be sold? Our firm buys non-performing finance products up to four years old from the date of the last payment, including commercial loans, leases and lines of credit. These can have personal guarantees, no personal guarantees, be secured, unsecured, pre-agency, post-agency, pre-litigation, reduced to judgment, etc. Other commercial debt buyers may have different criteria.

How does a lender decide what to sell? Lenders may sell off some financial products but not others, or they may include all financial products meeting their criteria. They may base their decision on vintage, such as whether an account is pre charge-off, post charge-off, zero agency or post agency. Our company feels post charge-off is usually the best timing. Lenders also may decide what debt to sell based on geography (national vs. state by state), specialty (Chapter 7 & 13, judgments), out-of-statute vs. in-statute (OSS accounts sell for basis points; ISS have the option of being litigated), by quality (prime vs. sub-prime), by balance (packaging a specific balance segment vs. the entire pool of non-performing accounts) or by pool size (one-off vs. pool).

How frequently should a lender sell? Our firm will work with lenders on a single engagement at a time if desired or multiple engagements over time. Many lenders choose to establish a forward flow relationship where they send us information on non-performing finance products on a regular basis for pricing.

What steps are involved? At our business, lenders new to the process start by contacting me at or 847.267.0660. Next, they provide basic information on the pool of assets to be sold. We evaluate the assets and then make an offer. After the lender signs the purchase agreement, we wire the payment. Transactions in an established forward-flow relationship are even quicker. They can usually be handled online, with the resulting payment wired in 24 hours or less.

What happens to the accounts once sold? At our company, we work carefully and professionally to collect what we can of the debts over time, without representing ourselves as part of your business. TBF collects in its name only. We also do not re-sell the accounts. Our philosophy is most debtors intended to make good on their promises at the beginning of the transaction, so our goal is to make repayment as positive an experience as possible. That way the debtor is open to pursuing credit from the same lender in the future as a customer in good standing.

More questions? If you’d like to learn more and discuss the unique needs of your company, just reach out to me via my contact information below or we can plan a meetup. Our headquarters is in Chicago but I travel frequently.  I’ll be at LendIt Fintech USA April 8-9 in San Francisco, the Debanked Broker Fair in New York City May 6, the pre-show party the night before, and ELFA’s Capitol Connections May 15 in Washington, DC. Travels later this year include speaking at LEND360 in Dallas.

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

Putting the Shine on Non-Performing Loans & Leases

We are nearing the end of the quarter and the conclusion of the fiscal year for many companies. If you are involved in lending or equipment finance, someone in your business probably is taking a fresh look at the year’s non-performing loans and leases (NPLs). Your company may be exploring smarter options for the year ahead.

The latest issue of the National Equipment Finance Association’s Newsline includes an article covering one such option: commercial debt selling. It’s a strategy that banks, equipment finance businesses, online small business lenders and merchant cash advance companies are using to manage risks and generate revenue from NPLs.

The article is by yours truly. I was excited to contribute it and to discuss commercial debt selling and buying at the NEFA Funding Symposium. At TBF Financial we are passionate about helping our clients with NPLs and I appreciate having opportunities to educate companies about commercial debt selling options available them.

Just follow the article link for an overview of how commercial debt selling works. The article also covers pros and cons compared with alternatives, tips on vetting buyers and brokers, and reasons that now is the time to reevaluate strategies for handling NPLs. Chances are we are at the end of a market cycle, where defaults are historically low but are destined to rise.

Two questions I often am asked are 1) How does a company determine what to sell? and 2) What is the best timing? So, I put together a chart to summarize the categories that companies typically use to make this evaluation.

In other words, some sellers designate specific product categories that will be part of the sale. Others focus on certain geographies, specialties, balances, pool size and/or other criteria.

Best timing in the lifecycle of an account? We have found that many finance companies use commercial debt buying services to sell off accounts after they have gone into default and been charged off. This seems to be the sweet spot for companies because collection attempts have run their course by this point. We have some customers who sell off all their accounts after charge off, while others sell off accounts below a certain value and litigate those above.

Another question I often hear is, “How can I preserve customer relationships and maintain control over accounts after they are sold?” This is easy if you are dealing with a reputable, experienced buyer. The NEFA Newsline article discusses specific ways to make sure that you are working with the right commercial debt seller for your business.

Thanks to American Dream Machines for permission to use their photo of this beautiful 1966 Corvette Sting Ray.

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

Commercial Debt Buying & Selling Activity

Commercial Debt Buying & Selling Activity In Banking, Equipment Finance, Fintech Lending

By Brett Boehm

After an unpaid loan or lease reaches the charge-off stage, it’s called non-performing paper. But that’s really a bit of a misnomer. Non-performing paper can still pay off for finance businesses. Some equipment leasing companies, banks and fintech lenders sell all their non-performing loans and leases to commercial debt buyers. Others litigate balances above a certain amount and then sell off the rest.

The economy is one factor that can drive commercial debt selling cycles up and down. Interestingly, the Great Recession affected banks differently from equipment lessors in this regard – and later attracted alternative lenders. Here’s a brief overview of commercial debt selling trends in finance over the past 20 years.

  • Back in 1998, few bank boards were willing to authorize debt selling activity for commercial non-performing paper even when bank executives expressed interest in it. Banks were in their heyday then, and their boards did not yet realize the value of selling commercial debt.
  • Equipment leasing businesses specializing in small-ticket transactions were among the first lenders to sell off non-performing commercial paper. By 2005, increasing numbers of lessors were using commercial debt buying services regularly, and most were doing so soon after charge-off. (This timing is still typical today, regardless of the type of lender.)
  • The Great Recession slowed commercial debt selling activity in equipment leasing significantly between 2008-2010. Yes, there was more non-performing paper available to sell, but much of it was uncollectible due to lessee business failures. Activity has been gradually picking back up since 2015.
  • Conversely, the Great Recession prompted banks to take a closer look at commercial debt selling options. Activity increased considerably as banks started selling their non-performing paper to improve internal efficiency and generate fast revenue.
  • Merchant cash advance services and later, online alternative lenders, entered the small- business lending marketplace in the aftermath of the Great Recession. Some alternative lenders are now using commercial debt buying services in the same way as traditional lenders do. In fact, this option is an especially good fit for fintech lending business models.

Commercial debt cycles are covered in greater depth in “Selling and Buying Commercial Debt: An Industry Evolves” in Equipment Finance Advisor. The guest blog post also discusses recent credit risk data, seller strategies and how to vet a commercial debt buyer.

Our own blog posts and website discuss how the process works and relevant developments. Alternative lenders may wish to visit for information on how selling off non-performing paper is a good strategy for fintech business models.

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

Fintech Small Business Lenders Evolve

Impressions from LendIt Fintech USA 2018

By Brett Boehm

Sorting through key takeaways from a conference as large and diverse as LendIt Fintech USA is like trying to remember the highlights of a cross-country road trip. Fortunately, I chose one “road” to travel there – the small business lending channel. It was one of many channels offered during the conference April 9-11 at the Moscone Center in San Francisco.

Small business lending sessions covered:

  • Leveraging the Leading Brand in Small Business
  • Real-Time Credit Approval Using Proprietary and Traditional Data
  • Is Digital Supply Chain Finance Positioned to Take Over Invoice Finance?
  • Competitors in Collaboration: Innovation and Opportunity in Online Small Business Lending
  • Creative Ways to Serve Underserved Businesses
  • The Explosion in New Data Sources: Making Sense of it All
  • Push Payments Set to Take Over Lending, and
  • The Future of the Bank/Online Lender Relationship

The following are just a few impressions from attending the sessions.

Photo Courtesy of LendIt.

Expanding Products

One of most compelling sessions for me was the segment on Push Payments Set to Take Over Lending, which focused on how alternative small business lenders are adding products to tap more of their borrowers’ business. Speakers included Lisa McFarland, executive vice president and chief product officer of Ingo Money; Cecilia Frew, senior vice president and head of North American push payments for Visa; Kathryn Petralia, president and co-founder of Kabbage; and moderator JP Mangalindan, chief tech correspondent for Yahoo Finance.

That same day, Kabbage and LendingPoint had unveiled plans to offer push payments to borrowers. “Kabbage and LendingPoint each separately announced today that they will soon be able to get funds into their customers’ business accounts instantly and 24/7 via their pre-existing bank debit card,” reported Todd Stone in deBanked. “Hopes for this are not brand new. Last October, OnDeck announced a partnership with Ingo and Visa that would provide this convenience to borrowers, although this has not yet come to fruition, according to an OnDeck spokesperson.”

Zeroing in on the Kabbage announcement, David Penn in Finovate wrote, “Kabbage will use Ingo’s Push Platform, with its push-payments-in-a-box technology, to disburse loan payouts to customer accounts securely and in real time. The partnership between Kabbage and Ingo Money helps close the gap between business loan approval – which can be completed in minutes – and delivery of funds – which can take a day or more. Kabbage sees faster fund delivery as key to helping SMEs have better cash flow management and a compelling opportunity for small business owners. In its statement, the company pointed to a Visa survey that showed that small business owners, 70% of which own a small business debit card, would get a new card if real-time transfers were available.”

Intrigued with the discussion about this at the push payments session, I also stopped by Kabbage’s booth to learn more about how this will work.

The typical online small business lending transaction today creates a new digital agreement with the borrower for each individual business loan. Business loans are generally for six months or less. My understanding of the new Kabbage push payments is there will be an underlying master agreement that facilitates them. To me, this sounds similar in some ways to how a bank handles lines of credit.

Approved borrowers will be able to use their debit card for even the smallest purchases, on the spot. Let’s say a borrower is at a trade show and realizes more booth supplies are needed, he/she can buy supplies immediately with the debit card. Of course, there will be many other uses. Alternative lenders seem to be getting more comfortable with traditional lending methods and are focusing on distributing money even more quickly and efficiently to customers.

It is already easy to apply for a small business loan from your smartphone and secure the necessary funding. So alternative lenders are finding ways to gain a competitive advantage and, hopefully, attract more business. They are hoping that fast, convenient push payments will encourage increased borrowing. The debit card is the latest progress in this concept.

Photo Courtesy of LendIt.

Collaborative Platforms

LendIt Fintech USA 2018 provided an opportunity to learn more about other industry developments. Collaborative lending platforms created by companies with groups of small business lenders are particularly interesting to me. The borrower submits a loan application to the platform and it is matched with the small business lender that is in the best position for the transaction.

This was discussed as part of The Future of the Bank/Online Lender Relationship session featuring insights from Sam Hodges, co-founder and chairman of Funding Circle US; Ryan Rosett, founder and co-CEO of Credibly; Rohit Arora, CEO and co-founder of Biz2Credit; Sam Graziano, CEO of Fundation; and moderator Bill Phelan, president and co-founder of PayNet.

Credibly is a small business online lender.  Fundation seems to do quite a bit in different segments: they act as a small business online lender; help banks by re-engineering the small business credit delivery process, which drives more demand for banking products; and assist in developing solutions that partners serving the small business market can offer customers and clients.  Funding Circle has a platform that connects investors with businesses looking for capital.  Biz2Credit’s platform matches borrowers to sources of capital based on each company’s unique profile.

I see platforms like Funding Circle and Biz2Credit as a double-edged sword for participating lenders but also an inevitable development with a definite upside. On the one hand, lenders will get referrals they may not normally attract; on the other hand, they may lose some commissions because of the competition.

Overall though, this is an interesting and attractive business model. Overhead for the platforms is typically quite low and they are designed to respond quickly to changing business needs. Think of how StubHub brings together ticket buyers and sellers and it is all handled electronically with very little overhead for Stubhub. Or think of Uber. It makes sense that alternative small business lenders have adapted this business model, too.

Top Speakers

I was impressed with the high quality of the session speakers at LendIt Fintech USA. Speakers included CEOs, presidents and COOs of large companies who you would normally only hear delivering a broad keynote address. The more intimate session settings allowed for specific discussions on small business lending with some of the top leaders in the industry.

Speaking of intimacy, I was also struck by how the conference layout in the Moscone Center (Moscone West) made a huge show attracting thousands of participants seem manageable to navigate.

Blockchain Ruled But…

I would be remiss if I didn’t mention the many sessions devoted to financial blockchain technology during the event. There is certainly intense interest in this, and rightly so. But not everyone is equally excited about blockchain. I recall one keynote speaker saying blockchain in some ways seemed to be a solution looking for a problem.

For an overview of the event, here’s a great wrap up by Peter Renton, co-chairman and co-founder of the LendIt Conference, with links to some of the presentations:

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

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.