Not too long ago, an I.T. business contacted me and requested to know if anyone would be interested in purchasing debts, which were around £2 – £3k in value, of which he had two or three.
Debt Sales usually work in B2C, where consumers have taken out loans, credit cards, finance agreements and occasionally banks. Finance agreement providers would usually bulk up large volumes of cases as low as 100 cases (or a little lower) to around 2,000 cases and would usually take place on a monthly, quarterly or bi-annual basis.
The process itself can be boring in which these finance providers, credit card companies, and banks would usually write off the debt as bad debt and/or items which are collectable over some time to bring in a small portion of the profit, usually at around 5 – 20% of the overall value of that debt value.
Debt sales are made to industry-specific purchasers, who then usually chase debts like a debt collection agency would.
To summarise, debt sales may happen in some B2B areas, but only if there is a security on the debt, such as a personal guarantee. Predominantly for unsecured debt balances, there is usually little or no leverage, but regretfully it doesn’t take place on small debt balances. If this does occur, it will be at a fraction of the price for the business owner as there is no guarantee for the debt purchaser to pay the full balance if they do not receive any ROI back.
If you would like to know more and/or wish to discuss the best route for debt recovery for your debt balances, then please do not hesitate to contact me.