Commercial Debt Collector
A commercial debt collector has to be diplomat, investigator, accountant and eventually often a tough guy. Each of these hats worn by this professional are put on or taken off at various times, depending on the size of the debtor's business and the stage of the collection process. For the corporate side of things, millions of dollars could be at stake while the small business owner may be holding out on a few thousand dollars just to stay in business. A one size fits all philosophy will definitely not work when it comes to commercial debt recovery tactics. Neither will the harassing, strong arm tactics from previous generations. A lot of the movies have portrayed debt collectors in the past as big hairy gorillas that much preferred to pound somebody's head in rather than sit down and try to work out some kind of payment plan. To be a commercial debt collector today, one must know each customer's method of doing business including how billing and receipts payable are handled, must become a presence not resented when calling or visiting business sites.
When handling a large account, the commercial debt collector probably spends more time in correcting paperwork than in actually collecting money. Despite the proliferation of automated accounting systems where the computer is never wrong, the task of reconciling accounts can be the most common task assigned to a large account collector. Consider how multiple invoices for the same service could cause an issue, or a missing invoice (one that was never generated) could drive everyone crazy. Then there might be a pricing issue. What if a customer who ordered four thousand bags of oranges and found that forty bags were spoiled on delivery? Under the supplier's policy, the customer can opt to not pay for them, but rather than short the current payment, the next invoice payment is shorted to make up for the forty bags. And what if there isn't a good paper trail?
The commercial debt collector could spend days trying to track down that issue, but how about pricing issues? That "make everybody happy "sales department gives a nod to a lower price on a shipment of product but no one tells the billing department and away we go again. What about a shipment that arrives damaged and is returned, but somehow is not recorded by the receiving department when it is returned? Investigator, reconciler, accountant and even diplomat are in the recovery agent's job description. For giant corporations where a million dollar past due account is like a flea on a camel's tail, the camel would like to be rid of the thing but a hundred others are trying to get into its eyes. What sort of collector would one want headed to that corporate headquarters and what would be the greatest strength that recovery expert would possess? The Bible is filled with incredible insight and teaching; that is why the psalmist wrote," Open my eyes that I may behold wondrous things out of thy law." (Psalm 119:18)
Clear written communication must be an attribute of the commercial debt collector when it comes to crafting dunning letters to overdue customers. Usually dunning letters are progressive in nature. "Dear Sir, we know that your accounting department has just overlooked this overdue account, blah, blah, blah." "Dear Sir, we are hoping that your failure to respond to our recent letter can be blamed on a postal worker who lost his mailbag." "Dear Sir, since you have obviously ignored all attempts to collect this bill, we are forced to hire our attorney, Mr. Bill 'Mad Dog' Bumstead to sue you and your grandmother." But seriously, letters must be written to match the culture and the type of business being pursued.
One of the clear obstacles that the commercial debt collector must face is the skip mentality that might be pursued when a small business owner is faced with insurmountable bills. It's the "close up shop during the middle of the night and be in Nevada by the next evening" sort of thing. Any collector worth his money must have on hand skip tracing tools to help located a suddenly vanished delinquent account holder. Some debt recovery firms might advertise that they use social engineering strategies to find missing overdue account holders. What that means is that the collector will use all the online information available to then go talk to neighbors, family members, business associates and other possible resources persons to locate the missing person. Utility bills, tax records and other information are available to recovery experts who have all the rights online software tools. But often that information only leads to good old fashion pavement pounding.
The commercial debt collector has a final assault weapon in the form of a good collections attorney. The recovery agent is really not served well by having to hire an expensive attorney, so before that occurs, the company that hires the commercial debt collector will welcome the agent being able to negotiate a payment plan for past due accounts. Sometimes the best a collector can achieve is a percentage of the lost revenue, but when an attorney is employed, real estate attachments, bank account attachments and other hard core efforts can be made to recover monies owed. When hiring a commercial debt recovery agency, check references, reputation and make sure that there are no licensing issues in the state where the recovery effort is being made.
Commercial Hard Money LenderA commercial hard money lender is an investor poised to help entrepreneurs, developers and contractors to react swiftly to sudden golden opportunities. Opportunities that could possibly be taken by another more financially able colleague or company. In most cases, a commercial hard money lender is a person who invests in properties, land or other collateral assets with which the man is familiar. The familiarity of the project plays directly into this investor's hand because in typical fashion the lender will already know the potential of the property and can make a quick judgment about becoming involved in the transaction or not. The quickness with which this loan resource person can supply needed cash is the reason all of these shaker and movers look to private money dispensers. They are willing to pay high costs and often put their own property on the line to make the whole deal come together.
A commercial hard money lender doesn't typically hang out a sign advertising his lending availability. In a small town, the lender will probably be quite well known; if for nothing else than wealth. In a city, lenders may be anyone who has a stomach for high risk and tough requirements. Their names may only be known to the elite financial circles. But banks, which traditionally have had no stomach for high risks often refer these borrowers to those who can privately dispense large sums of cash in a hurry. Therein lays one of the secrets of success for the commercial hard money lender. Without government regulations throttling what the investor can do with private money, the investor is free to put any limitations or outrageous demands in the contract that the man desires. Usually these are within a certain limit of reason, but the borrower is never under any illusion; the cost of borrowing will be steep and the loan will have a short shelf life. But like the tightrope walker, the borrower's loan pain will not overshadow the potential profit or accolades.
From the very beginning the borrower comes in a begging position. Perhaps there is a piece of land that has just gone up on the market, like a farm near town or city, or land in town that has been rezoned for business or maybe something such as rundown shopping mall that has potential when remodeled. If the clock is ticking on this property and there are others interested, a hard lender sought over the Internet would have to fly in and see it and that might takes several days or longer to occur. Working with a commercial hard money lender from the area means that from the very first meeting, the investor and the borrower can talk about assets and liabilities regarding the property itself. The lender will want to know just how prepared and well thought out the borrower's plans are, even though the property might have just come up for sale.
The borrower is in a tough spot because he doesn't have the money to make this quick purchase and in many cases, his credit might not be great. The credit problems aren't a big deal to the lender, for the agreement that will be struck will cover him in a secure manner. But the private cash dispenser will very interested in how the borrower is going to get the other forty percent of the money because he will not lend over sixty percent of the full amount. In fact, unless the borrower has a generous stake in this deal personally, it's "Here's the door and don't let it hit you going out." A business man may have to put up a substantial amount of his own cash, or use his business property as collateral or a favorite of the commercial hard money lender, the man's own house. But the security for the loan will be there in substantive ways that will favor the high rolling hard money lender. Jesus had the riches of heaven, but God had a better idea: "For ye know the grace of our Lord Jesus Christ, that, though he was rich, yet for your sakes he became poor, that ye through his poverty might be rich." (II Corinthians 8:9)
It is certain to the borrower that this is going to be expensive money that he will have to get in order purchase this golden parachute project. In many cases commercial hard money lender loans, sometimes called bridge loans, will be in the millions of dollars and the interest rate may be as high as twenty percent or more. In addition to the high interest rate, the borrower will also pay points, with each point worth one percent of the loan's value. Initial points may be as many as four or five and there is usually at least a point assessed if the loan is paid off too early. In most cases the loans are not for more than three years, but they are more likely to be in the 12-18 month range. The entrepreneur requesting the money usually knows that the project that is being created will be able to be sold or utilized within that time frame and payoff, or another long term loan will be available.
The discussion about commercial hard money lender practices brings up an extremely salient point. It should be remembered that this investor is usually an honest business man. Check references before using one and ask the Chamber of Commerce office and Better Business Bureau about his reputation. But honesty can walk hand in hand with greed. Pitifully, the US economy has been based for the past thirty years on outrageous usury by credit card and loan companies breaking the back of so many millions of people. God is not happy and does not bless usurious practices by greed-driven businesses. Perhaps recent economic earthquakes portend judgment upon America for a long list of sins, including usury.