advertising section Convention sponsors
Let’s face it: uncollected commercial
loans and lines of credit are an inevitable
byproduct of even the most successful
commercial finance company. Despite
commercial lenders’ most rigorous due
diligence, borrowers sometimes do not
meet their obligations.
Lenders are then faced with some
difficult decisions. They know the clock is
ticking once payments are missed on an
account. If the borrower fails to make a
payment within the specified time period,
the account is written-off.
But then what happens?
This is often the point where many
lenders are left scratching their heads,
wondering what to do next with these
non-performing accounts they have
But now there’s now another option for
these commercial lenders: sell them.
Many successful commercial finance
companies have learned firsthand that
their written-off commercial loans and
lines of credit still have value. And, unlike
the other limited options available, selling
non-performing commercial paper is un-
complicated, can be accomplished quickly,
and, best of all, contributes immediately to
the seller’s bottom line.
I know this firsthand because my company, TBF Financial LLC, has exclusively
served many of the largest commercial
finance companies by purchasing their
portfolios of commercial loans and lines of
credit that were uncollected and written-off. In fact, TBF pioneered this service when
it was founded in 1998 and has now refined
and perfected a simple, easy process that
pays commercial lenders cash up front for
accepted pools of non-performing commercial accounts.
Here are a few of the most significant
benefits to lenders selling their written-off accounts.
First, selling write-offs is the easiest
way of converting them into cash and
improving cash flow. With the sale of
written-off accounts, there’s never a better
time to act than the present--as soon as the
account has been written-off. The debt will
never have more value, and the sooner the
lender recoups this value in cash through a
sale, the better.
Once sellers complete their first sale of
non-performing paper, they often see how
easy it is to realize cash on these accounts
and then enter into a proactive arrangement to automatically sell their write-offs
on a regular basis. The revenue generated
becomes a positive line item in their budgets rather than a liability.
Second, since these accounts have been
written-off the seller’s books as having no
value, the purchase price is a “recovery” for
accounting purposes and goes directly to
the seller’s bottom line as profits. As a business strategy, many commercial finance
companies will conduct regular sales of
their written-off accounts monthly, quarterly, or, at the very least, at the end of the
fiscal year to increase their annual profits.
Third, some companies sell their write-
offs as soon as they determine they cannot
collect them internally or could utilize the
proceeds better elsewhere. These compa-
nies have learned that guaranteed cash
now is better than the diminishing pos-
sibility of payment later. Again, once a debt
has been written-off, an immediate sale is
the best way to convert it into a positive
line item on the lender’s balance sheet.
Selling non-performing paper is a very
easy process. The seller prepares the
basic information on the pool of non-performing accounts that is needed for
review. The buyer assesses this information and offers a price for the written-off pool of accounts. If the price is
acceptable, a purchase/sale agreement
is prepared and the transaction closed.
The entire transaction can be completed
in a very short time, with a wire payment
of funds to the seller made on the date
Let us show you how selling written-off
commercial loans and lines of credit is
an easy way to convert your non-performing accounts into immediate cash
and profits, improving your company’s
bottom line. Visit the TBF Financial
display booth at the CFA Convention this
November in Los Angeles and see why
TBF is the commercial finance industry’s
leading debt buyer.
Brett Boehm is the principal/director of
business development for TBF Financial LLC.
Headquartered in Deerfield, Illinois, TBF has
been the leading purchaser of written-off
commercial loans, lines of credit, equipment
leases, and other forms of non-performing
commercial accounts since its inception in
1998. A 1998 graduate of The John Marshall
School of Law, Boehm has been with the
company since its founding.
BY BRETT BOEHM