- 870 Sheridan Road Highwood, IL 60040
- tbf@tbfgroup.com
- 847.267.0600
Just as TBF Financial pioneered commercial debt buying in the equipment finance industry, our innovative strategy for recovering value from loan and lease charge-offs is also benefiting today’s fintech lenders and banks. TBF is the leading purchaser of non-performing equipment leases, commercial bank loans, online small business loans, merchant cash advances and commercial credit card accounts in the United States.
We ask for basic information on the pool of assets you are selling, evaluate the assets, make an offer based on our Data Driven, True Market Pricing, and wire payment after your company signs the purchase agreement. It’s fast and simple. Transactions in an established forward-flow relationship are often handled online and move even faster, with payment wired in 24 hours or less.
Our pricing is competitive and flexible, thanks to TBF’s Data Driven, True Market Pricing algorithm based on decades of historical data. We offer aggressive prices that reflect the assets’ fair market value – and, unlike some buyers, will never overpromise then fail to deliver. Our goal is to establish a long-term relationship with you.
Earn immediate cash at closing for commercial loan and lease charge-offs you sell to TBF. This strategy will pay off for your company in other ways, too. Your staff can focus on earlier past-dues that are more likely to be recovered, for faster collections, and you’ll have a future-proof plan in place for managing rising defaults and predicting cash recoveries.
Once they’ve made repeated attempts to collect on non-performing accounts, many commercial lenders and lessors litigate some of the accounts and sell off others. Selling off debt makes good business sense because it offers at least three key advantages.
No. 1: the seller can earn immediate cash at closing. Improving cash flow is a goal in any economy but especially so in an uncertain marketplace. Finance companies in growth mode can also use that cash to support more revenue-generating areas of the business. Plus, finance businesses in a forward-flow relationship with their debt buyer can count on a definite return at closing versus risking diminished returns in the future.
No. 2: it frees up internal staff to concentrate their efforts on earlier past-dues, which have higher recovery rates. Strategies that enable staff to focus on earlier past-dues will increase recoveries plus reduce the overall collections cycle.
No. 3: it’s a strategy for managing rising defaults. As defaults climb, internal staff often struggle to handle the expanded volume. Selling off commercial debt that has matured is a way to manage the growing workload.
Generally speaking, commercial debt sales usually involve pools of non-performing commercial accounts. They can be any size and, in TBF’s case, we buy those that are in statute.
The accounts may include loans, equipment leases, lines of credit, commercial credit cards or merchant cash advance. They may have personal guarantees or no personal guarantees, be secured or unsecured, pre-agency or post-agency, or pre-litigation and/or reduced to judgment.
Some companies decide to sell all or most of their non-performing accounts at charge-off. Others determine which pools of assets to sell based on their vintage, geography, balance or size.
Again, each seller decides timing based on its own criteria. We recommend that the best time to sell commercial debt is at charge-off for most lenders and lessors. This is the write-off stage, when the account has been thoroughly worked internally and the balance has been written down to zero.
Companies can sell their commercial debt on a transactional basis or establish an ongoing, forward-flow relationship with a buyer.
For the first transaction, the seller typically contacts the potential buyer or broker and provides basic information on the accounts being sold. The buyer and/or broker should sign a non-disclosure agreement (NDA) before accepting the seller’s information.
The buyer then reviews the accounts and then offers a price. If accepted, the seller signs a purchase agreement, and the buyer wires payment.
Once the seller and buyer have established an ongoing relationship, regular transactions are typically handled online, within hours. In such forward-flow relationships, a seller may choose to send the buyer a list of accounts at regular intervals, perhaps monthly, for pricing.
In general, pricing should be based on decades of historical data. It should be competitive, reflecting the assets’ fair market value and the buyer’s goal of establishing an ongoing relationship with you.
Within those parameters, you, as the seller, are looking for the best deal, of course. But we recommend shying away from unusually high offers. Why? A few buyers have been known to overpromise and then fail to deliver payment when the seller is counting on it. Deal with buyers who have a good reputation in your industry and have the cash on hand to close the deal.
A reputable buyer serving your industry will work professionally and diplomatically to collect what it can of the debts, over time. The buyer will use its own company name – not the lender’s or lessor’s – when contacting debtors, and will try to make it as positive an experience as possible. If a debtor’s finances improve in the future, you want the debtor to consider applying for credit with your company again.
Reputable buyers also keep the accounts once purchased; they don’t re-sell them. That way, a seller can buy back a single account if it was somehow mistakenly sold.
If you are with an equipment finance company, bank, online commercial lender or merchant cash-advance business, CEO and Founder Brett Boehm and the entire TBF team are ready to answer your questions and get you started. We will provide a free, no-obligation price estimate on the pool of assets you are considering selling.
