December 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.