- What types of companies
can use your consumer finance services?
Our consumer finance services are directed to companies that sell goods
or services to consumers via an installment contract (a.k.a a retail
installment contract). There may be a formal contract or there
may not (e.g. goods or services purchased via an infomercial). The
"contract" will have a fixed price for what is being purchased, a fixed
payment term, and a fixed monthly payment amount. It may have an
interest rate associated with it.
- What is the
minimum number
of consumer accounts for which you will do billing services for a
single client?
You can start with as few as 50 accounts to utilize our
consumer billing services.
- Can I check the status of
my accounts online?
You have online access to check the status of your accounts for
which servicing is being done.
- Do you only collect on
non-performing consumer paper?
Our collection people are able to handle both consumer and commercial
collection challenges.
- When I send you my
non-performing accounts for collection are you buying those accounts?
No. Your accounts are taken in on a contingent basis. Our
collection people will attempt to collect on the non-performing
accounts
you submit. If successful, usually one-third of the recovered
amount
will be kept as a fee and the remainder returned to you. Your
accounts will be returned to you when our collection efforts are
completed. You can then do further collection or charge-off the
accounts on which collection has been unsuccessful.
- Is there any up-front cost
to send you my non-performing accounts for collection?
No. You only pay when recovery has been made from your accounts.
You are paying for results and not for the time actually expended to
collect on your accounts.
- How can I check the
collection status for the accounts I have sent you?
You can access the status of the collection efforts on your accounts
via an online system. You can check this status at any time.
- What is the minimum dollar
amount of non-performing accounts
I need to have to establish a collection relationship with you?
The minimum to be submitted for collection is about $25,000 to start
with. However, smaller amounts will be considered if a steady
stream of new non-perfomring accounts can be anticipated.
- Why should I offer
financing to my customers and sell my consumer contracts?
The benefits to you of providing financing and selling your consumer
contracts are listed below.
- add customers (and
profits)
you would not have had without offering financing to prospective
customers
- improve your cash flow by
making future cash available now to reinvest in your business
anyway you want
- get cash into your
business
without creating new debt or giving up ownership by selling equity
- take advantage of
volume or prompt payment discounts because you have the cash to do so
- Will you buy existing as
well as new consumer contracts?
Yes. We can buy both existing and new consumer contracts.
Which contracts you choose to sell is up to you. For existing
account portfolios, the value of the portfolio should be at least
$100,000. For new business, the monthly volume of business should
be at least $10,000 per month.
- Are there any up-front
costs when I sell my consumer accounts to you?
Yes. There is a one time charge of $250 to $500 for "due
diligence". This "due diligence" includes a review of the financial
records for your company, a review of the personal financial records of
the principal officers of the company, and a review of the business and
credit history of the company.
- What types of businesses
should consider offering financing and selling their consumer
contracts?
Any small to medium size business selling a high-margin product or
service to consumers that wants to expand their customer base, and
needs the cash from those sales now to reinvest in their business.
- For what types of consumer
goods and services do you buy installment payment contracts?
The following is a partial list of those consumer goods and services
for which financing can be obtained. If you do not see your product or
service below, and you sell to consumers, please contact us to see if
we can finance your product or service.
- health club
membership sold on a 1 or more year contract
- home gym equipment
- computers
- anything sold via infomercials (direct response TV)
where multiple payments
will be received over time.
- products or services marketed through direct marketing
channels where the product is paid for via installment payments
- business opportunities
and
seminar sales
- E-commerce web sites and
associated mentoring/training
- vocational and trade
school
tuition loans
- computer-related
- nursing
- medical technician
and office administration
- phlebotomist
- pharmacy technician
- massage
therapist
- cosmetologist
- dental assistant
- truck driver
- heavy
equipment operator
- auto and diesel mechanic
- HVAC (heating, ventilation, and air
conditioning)
- computer-aided
design
- plumber
- electrician
- locksmith
- medical procedures
(patient
pay portion only)
- elective cosmetic surgery
- radio keratotomy
- lasik
- in-vitro fertilization
- medical products sold to
consumers (patient pay)
- wheel chairs
- electric scooters
- insulin pumps
- defibrillators
- hospital beds
- vacation and travel club
memberships
- timeshares
- dating services
- martial arts school
tuition (e.g. karate, tae kwon do,
kick boxing)
- dance schools
- golf club memberships
- jewelry
- home food plans
- college prep services
- discount buyers clubs
- any product or service
sold
to a business where the business owner signs the contract as an
individual rather
than as the business
- For what types of consumer
paper do you not buy
contracts?
The following cannot
be financed via this program.
- automobiles
- boats
- air planes
- real estate
- Do you provide financing
to individual consumers?
No. We provide the financing to the businesses that sell products
and services to individual consumers. If you are an individual who
would like to do business with an entity that does not offer a
consumer finance program, please tell that business owner about us.
- I already have a consumer
financing program. Why should I consider yours?
If your current underwriter only finances "A" credit consumers, then
you are missing out on additional business. We can add "B" credit
consumers to those that can buy your product or service. It may
also be possible to finance "C" credit consumers, but this will depend
heavily on the profit margins of your product or service.
- What is the minimum
monthly dollar volume of consumer contracts you will buy?
In general, the minimum monthly volume we will consider is $10,000 in
new contracts.
- What is the
range in
value of the individual consumer contracts you will buy?
The value of the
individual contracts
can range from $500 to $15,000. If the value of the
contract is above $15,000, then the consumer will need to make a down
payment to bring the amount be financed to $15,000. The following are
the
exceptions to this. High volume products (e.g. those
sold via infomercials (direct response TV)) must have an aggregate
dollar volume of at least
$10,000 per month.
Golf club memberships can have a value of $40,000 per account with a
maximum term of 36 months on the contract.
- What is the allowed term
of the consumer contracts you will buy?
The term of the contracts can range from 6 to 60 months. The exceptions
to this is high volume products where the monthly sales volume is at
least $10,000, and golf club memberships at 36 months.
- Do you offer an online
credit decisioning system?
Yes. This system is avaiable to clients in certain
retail businesses where the absence of a quick credit decision may
cause the business to be lost.
- How do you handle
"recourse" for accounts that default on the contract?
There are a couple of ways to handle "recourse" for accounts that do
not perform. The first is to hold a "reserve" amount on the amount of
the contract that is advanced to you on the contracts that are
purchased. The amount of the reserve is typically about 15% of the
contract value, although it may be higher if the credit quality of the
accounts being financed is lower. The amount of this reserve that is
eventually rebated
to you will depend on the default rate in the portfolio of contracts
that you sell. The second option is to replace the non-performing
account with an account that is performing.
- What interest rate should
I charge on my consumer contracts?
We recommend that you charge an interest rate of 18%. You can
charge less than this, but the discount we charge you for our service
will be increased proportionately.
- What is the discount you
charge for your service?
We earn our income in two ways when buying consumer contracts.
First, we keep the interest
charged to your customers on the contracts you sell to us. In addition,
we also charge you a discount fee. The amount of the discount fee
increases with the finance term of the contract, and as the credit
quality of the consumer decreases. In other words, the discount
will be greater for a "C" credit customer than it will for a "B" credit
consumer. It will also be greater for a 2 year contract than than it is
for a 1 year contract.
- What are the minimum
requirements for the consumers whose contracts you will buy?
The consumer should meet the following minimum requirements.
- the consumer must be employed
- the consumer must have a home phone
- they must be earning at least $20,000 per year and the
income cannot come from welfare or child support
- the consumer cannot be in bankruptcy, or have unpaid
liens, judgments, or accounts in collection within the last year
- the consumer must meet our credit history requirements
- Do you require a personal
guarantee from me when you buy my consumer contracts?
Maybe. This is done on a case-by-case basis. Some of the
cases where this is done are companies that are new, have few assets,
or are delivering "future services".
- What is the difference
between an account that is "non-performing" and one that is
"charged-off"?
A "non-peforming" account is one on which payments have stopped being
made, but on which payments may be made in the future. A "charged-off"
account is one where payments have stopped, and payments are not
expected to be made in the future. It is written off as a loss.
- What can you do with my
"charged-off" accounts?
Depending on the amount and age of your "charged-off" accounts, you may
be able to sell them. They are usually worth only pennies on the
dollar, or even fractions of a cent on the dollar. However,
remember we are
talking about accounts that you thought were worthless. This
becomes "found money" for you.
- What is the difference
between selling a
"charged-off" account and
sending an account out for collection?
Buying of "charged-off" accounts
should not be confused with sending an account out for collection.
When you send an account out for collection you still own the account
and receive a percentage of any amount collected. You consider the
accounts sent out for collection to have value. When the
collection process is completed, the account is returned to you.
When you sell a "charged-off" account you are giving up ownership of
the account. You consider the account you sell as a "charge-off"
to have no value. You receive an agreed amount for the
account. The account becomes the property of the purchaser.
- Is there a minimum amount
of "charged-off" accounts I must have before you will by them?
Yes. The minimums vary from about $300,000 up to $1
million. Larger portfolios of "charged-off" accounts are
preferred.
- Is there a minimum account
size within the portfolio of "charged-off" accounts that are being sold?
Yes. The minimum account size should usually be $500 or more.
- Do I receive a portion of
the proceeds of the recovery after I sell my "charged-off" accounts?
No. You will receive an agreed upon purchase price for the sale of your "charged-off"
accounts. However, you will not receive any of the proceeds
recovered from those accounts by the purchaser of your "charged-off"
accounts.
If you have additional
questions, or if you would like to learn more about how we can assist
with your consumer accounts, please
click here to contact us.
Call us now at 1-800-598-1178
to get started.
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