Commercial Collections Blog

When a lender considers extending a line of credit to a company, one of the items it will look for is a well-prepared business proposal with proper supporting documentation. Besides stating the purpose of the loan and exactly how the money will be used, some additional supporting documents the lender will look for are; resumes of the principals of the business, a repayment schedule that shows the ability to pay back the loan, collateral to secure the loan, business and personal credit scores (a credit score is simply a measure that estimates, based on solid data, the probability of an individual to pay their debts to their lenders) and  business and personal financial statements. This are basic concepts when small or mid-size business are watching when extending line of credit to customers, so when you request a credit line and you are into a position of financial strength, healthy bank rating, good credit score for your business, good cash flow, etc, your chances of being approved is much greater.
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Technorati Tags business credit report, collection agency, Credit Score, creditors

Credit applications can become outdated quickly.  Information on original credit applications ranging from trade experiences and credit line restrictions to management changes and financial information need to be reviewed at least every six months. Especially when conditions change within an industry or in the economy overall, the credit and finance professional needs to be diligent in updating the credit applications of their debtors. Personal and cross corporate guarantees need to be reviewed along with every aspect the original application contained.  Being diligent with these reviews could save your firm from experiencing an unnecessary bad debt write-off down the road. Remember that a business credit report is part of a solid debt collection strategy, for information on planning your debt collection action plan incorporating a business credit report, Burt & Associates our collection agency specialist can help you.

Technorati Tags business credit, business credit report, collection agency

Many elements make up a sound business credit application.  Seven of the more important elements are:

1. Audited financial statement request (or at least a section in the application where the customer can complete estimates of his or her firm’s key financial information, with signature, title and date lines for the debtor to confirm the information as being accurate);
2. Trade and banking information sections should allow for at least five references with room for complete addresses, phone numbers, contact names and email addresses;
3. Personal guarantee section (especially if a smaller or start up corporation);
4. Complete company name, address and federal identification number;
5. Product(s) sold and specific industry the debtor is in;
6. Management resume, including a section requesting information on any liens judgments, defaults or other negative information anyone in management (or any companies owned by anyone in management) has ever had filed against them;
7. Signature, title and date lines that include a statement verifying the above information as being accurate.

Having an effective debt collection strategy, the business credit application can help you identify your strengths and weakness, is part of knowing your client that may became a debtor. If you have any questions on business debt collection please contact us.

Technorati Tags BUSINESS BAD DEBT, business credit report

To be sure your company has a clear credit policy, there are a number of steps you can take. First, you should have written credit policies and a standard document for credit agreements. Contracts, invoices and followup letters should be clearly defined and policy manuals should outline the guidelines for assessing credit risks. Methods for collections should be clear for the customer and timetables for collection set out. As a backup, you should have a creditors’ rights attorney available and your company should also have an established relationship with a good commercial collection agency. Finally, as a last resort, there should be well defined criteria for making decisions about when to further pursue or write off a delinquent account. Taking steps to be clear will optimize the credit relationship with your customers and improve your chances of being paid in a timely fashion.

Technorati Tags business credit report

Credit applications can become outdated quickly. Information on original credit applications ranging from trade experiences and credit line restrictions to management changes and financial information need to be reviewed at least every six months. Especially when conditions change within an industry or in the economy overall, the credit and finance professional needs to be diligent in updating the credit apps of their debtors. Personal and cross corporate guarantees need to be reviewed along with every aspect the original application contained. Being diligent with these reviews could save your firm from experiencing an unnecessary commercial collection  bad debt write-off down the road, call Burt and Associates today to get a new improved credit application.

Technorati Tags business credit report, Commercial Collection