Bundling Distressed and Insolvent Accounts to Maximize Earnings

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Surprisingly, selling a business’s distressed and insolvent accounts separately may result in less total money being recovered. Taking these asset classes to market as a bundle instead optimizes the return on these debts for the seller.

Because many organizations manage their charged-off and insolvent assets through separate internal or external teams, the collective potential of these products is frequently overlooked. In the following article, Canaccede Financial Group reviews that there is a tremendous opportunity to increase selling value and operating savings by combining their worth.

Combining Asset Categories

Some receivable management firms are skilled at acquiring and servicing both insolvent and charged-off outstanding debt within a single transaction. Bundling allows the seller to capitalize on economies of scale. Put simply, the larger the multi-asset class transaction, the better the buyer’s capacity to blend margins and maximize the total price for the seller.

A buyer possessing expertise in diverse asset classes can leverage their resources to ensure optimal servicing of said assets, thereby passing on the benefits of an efficient cost structure to the seller through a bundled sale.

Single Point of Contact

Finding a debt buyer for a business’s insolvencies and distressed accounts enables them to have a single point of contact, facilitating a seamless transition of assets from charged-off to insolvent status.

This collaborative approach often leads to enhanced value generation for the company’s bottom line. Moreover, a debt buyer can engage with the seller to establish regular cash injections across various lines of business by arranging a forward-flow agreement on charged-off and insolvent debts.

Contracting with a single buyer for numerous asset classes cuts down on time-consuming discussions and collection practices for each. Selling distressed and insolvent accounts to different purchasers involves dealing with several systems and contact points, which takes time and resources.

Having all their old files in one place provides a strategic advantage for the seller, streamlining their internal operations.

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Increased Scope of Service

In addition to purchasing charged-off debt, a buyer who also acquires and manages insolvencies would also be able to provide entire insolvency processing services that are completely controlled by their organization.

A qualified servicer would analyze creditor packages and accompanying documents, prepare and file proofs of claim, handle all correspondence, documentation, and dividend follow-up in this type of sale structure.

Removing these duties from a seller’s internal team and obtaining a greater price for all assets enables a seller to redeploy their personnel resources to considerably higher-value activities.

Unlocking the potential of delinquent business assets presents a tremendous opportunity for those seeking unique and efficient ways to drive value. By viewing these assets collectively, businesses can tap into an immediate cash-infusion benefits, paving the way for enhanced operational efficiency.

This strategic approach is not just a one-time solution, but a recurring opportunity that can be executed month after month, leading to predictable and sustainable financial liquidity.

Over time, businesses will observe the power of this approach, as it generates significant value and propels their assets towards long-term success. Don’t underestimate the potential of delinquent assets; seize this opportunity and experience the remarkable impact it can have within the financial landscape.

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