Commercial Collections Blog

Extending credit to a customer requires careful consideration. Following are some concepts you should embrace when evaluating a debtor.

• Character. Timeliness, which you can implement an action plan for your obligations, how to treat your customers and employees and how to take responsibility are the key features when considering a credit line to a company
• Capacity. Frequency and record of the company’s borrowing activity, payments are made according to terms? How much debt the company can manage and what their financial reasons, all related to the ability of a debtor.
• Capital.  Is the company have a strong commitment with its business entity?. How well capitalized, is the company? These are important questions to ask when considering granting credit
• Conditions. How is the current economic condition of the company and how will face an economic downturn?. Questions any business should ask  when providing credit line to other business at the end you should ask this question “Should I give credit to this company?“
• Collateral. What assets does the company have that they can pledge as collateral? equipment, real estate, including inventory and accounts receivable are just a few assets we have to look in granting credit is based on a credit history less than full payment and financial situation.

Providing credit to customers or business does requires some of the above considerations. Remember that a business credit report also help you to identify  future problems and help you establishing a better debt collection strategy.

Commercial Collection Agency
Phoenix Area (480) 648-5776

Technorati Tags business credit, Commercial Collection Agency, line of credit

When a bank chooses to not renew a debtor’s credit line, creditors should immediately become proactive and try to find out why.  While the bank may not tell you outright, below are a few suggestions that may give you hints as to the underlying reason.

1: Pull a trade report on the debtor to find out if his payment habits have changed (and check your own company’s payment history with the debtor).  Have payments slowed over the past six months?

2: Request an updated financial statement from the debtor (or if a public company pull the latest one).  If the debtor does not have a current statement you need to find out

For more information contact us
Collection Agency B&A
(305) 735-1910
Solid Experience. Strong Solutions
Since 1979

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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.

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Many times, slow payment by customers is a result of the way a company extends credit, so it’s important to be aware of ways that poor credit policy can end up exacerbating unpaid customer balances. Following are some internal company situations that can actually cause customers not to pay in a timely manner (analyze your past due accounts with price collection quotes) your accounts receivables. The most important problem is a corporate culture that accepts slow payments as a fact of business life. When credit is provided to a new customer, running a credit check on the new business will be a good measure to know how reliable is paying their invoices. This will show the behavior to pay debt, information like history payments, or if the business have a outstanding debt, this are indicators for a solid credit policy.
Poor management can result in late payments if managers are reluctant to ask for money and pass that attitude down to staff members. Also, everyone will suffer if there is a lack of clear and purposeful company policies.
Also, staff without the right people skills to build relationships will likely be unable to listen and empathize with a customer while at the same time negotiate forcefully according to the rules of the game–that payment is due.
For a Credit Policy contact Burt & Associates.

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 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 and business and personal financial statements. if you are interested in how affects a line of credit for a small business, or if you are dealing with a company that you extended credit and has become a debtor, if you need a Commercial Collection Agency in Las Vegas please contact us (702) 920-0247

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The most important relationships in a business is the one between credit professionals and their sales counterparts. Among the principles involved in such a relationship are trust, understanding, shared objectives and shared responsibility. While business organizations are replete with policies, procedures and rules, in the end a business relationship comes down to one between human beings, who must judge the trustworthiness of their partners. When trust is missing it may be easy to misinterpret comments or attribute wrong motives to others. Understanding is also important between sales and credit. It’s essential that sales and credit understand each other’s agendas: keeping and expanding accounts for sales and minimizing past-due receivables and bad debt for credit. The shared objectives are to maintain both the strength and contribution of both the credit side and the sales side, since without the extension of credit there would be fewer sales and without sales there won’t be a credit department. Finally, it’s essential to develop clear policies and procedures to avoid potential disagreements between credit and sales and for sales and credit to inform each other about any change. To increase cash flow and reduce the stress of commercial collections or business to business, contact us for more details

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Following are some internal company situations that can actually cause customers not to pay in a timely manner. The most important problem is a corporate culture that accepts slow payments as a fact of business life. Poor management can result in late payments if managers are reluctant to ask for money and pass that attitude down to staff members. Also, everyone will suffer if there is a lack of clear and purposeful company policies. Also, staff without the right people skills to build relationships will likely be unable to listen and empathize with a customer while at the same negotiate forcefully according to the rules of the game–that payment is due. For Commercial Collections visit our complete solution from information on how you can establish a good credit policy to accounts receivable management.

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Do Inquiries Affect My Credit Report?

Any time you apply for credit, a lender will review your credit report and other information to determine your credit score. They use your credit score to decide whether or not to approve you for a loan, at what rate and for what amount. A number of things can affect your business credit report, including inquiries. The type of inquiry determines whether or not it affects your credit history.

Inquiries That Won’t Affect Your Credit Report

Pre-approved credit offers, employer inquiries and self inquiries do not affect your credit history.

Inquiries That Affect Your Credit Report

Inquiries related to home or car loans and credit cards will affect your credit score. Typically, for each pull, you can expect to see your credit score decrease by about 5 points (on a credit score scale ranging from 330 to 850). One or two inquiries aren’t enough to significantly lower your score; however, it’s still smart to use discretion when applying for loans.

Rate Shopping

When you shop around for the best rate on a credit card  or loan, you will incur inquiries with each request. However,research has shown that if your rate shopping all occurs within 30 days, the inquiries won’t affect your credit score the same way.

Other Factors

More important factors that can significantly affect your credit history include your payment history, employment status, amount of debt and amount of credit. Other factors of the debt itself you can find it in How to Collect a Debt for business owners is valuable information

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Access to credit remains strained for borrowers who are particularly dependent on banks such as small & medium businesses

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Whether you are a finance company setting up a financing facility with a lender or a manufacturer extending open account to a new business  customer, all forms of lenders look for certain characteristics when extending credit? Some of these are often referred to as the Five C’s of Credit. Capacity to repay is the most critical. Collateral and Capital are components that each lender should evaluate closely. Conditions often extend beyond the purpose the open account or financing is being sought. Such conditions as the economic environment and state of the industry the commercial business debtor is in should be closely looked at. And finally, Character, while subjective, is often considered as important as Capacity. Does the debtor’s history show they live up to their obligations? Does their history with you show a willingness to communicate openly about their financial situation–which includes providing audited and updated financial information if not a public company. Those in the credit/finance field that adhere to these five business  principals often have lower bad-debt at the end of the year than their less-vigilant competitors.

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