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Selling non-performing accounts is a reliable solution that generates immediate infusion for the creditor.  Instead of trapping working capital in accounts receivable, selling accounts provides immediate funds for otherwise distressed or dormant assets.  This can be helpful for companies with insufficient reserves and those experiencing a period of fast expansion.  By converting accounts receivables into cash, sellers can fuel growth opportunities, enhance marketing strategies, strengthen infrastructure or cover costs of short term liabilities.

Creditors that use collection agencies and law firms to collect their outstanding accounts are responsible for overseeing those vendors.  Policies and Procedures are needed to optimize the use of third-party debt collection service providers and to protect against risks associated with the debt collection process.  By selling accounts to a qualified investor, creditors can receive immediate cash flow and reduce the risks associated with debt collection.

When an account falls into delinquency, the creditor entrusts debt collectors to recover monies owed.   On the other hand, by selling distressed accounts, the original creditor is no longer responsible for collecting on unpaid funds nor accountable for contacting the customer.  By separating the relationship between the creditor and the debt collection process.  When the customer regains their financial wellbeing, creditors can benefit from the increased opportunity for future lending relationships with the same customer.

In this unpredictable economy, Delinquent and charged-off accounts receivables are problematic to predict.  The cash injection generated from these distressed accounts through the debt collection process is sporadic and difficult to anticipate with accuracy.  By selling distressed accounts at a pre-defined time in their lifecycle, creditors are able to more accurately foresee the timing of the cash injection, in contrast otherwise unstable returns from collection agencies.  This in turn enables the creditor to run their business more efficiently.