Many businesses may be able to convert their unpaid or slow-to-pay outstanding invoices into cash through factoring.
Factoring companies offer to advance 80% to 90% of the total invoices for fees typically ranging between 1% to 2.5%. Invoices are transferred to the factoring company where they then collect and extract their fee from proceeds. Collected funds after the fee are then passed back to the business.
The below article provides a recent review of some of the top factoring companies:
https://fitsmallbusiness.com/best-factoring-companies-hartford/
Scott F. Soape
Tuesday, January 14, 2020
Wednesday, December 4, 2019
Added Value
I was recently asked by a prospective client "What is the added value your service brings to a commercial debt settlement?"
Good question... and one I am always happy to explain.
To begin, having over 22 years of professional debt settlement negotiation experience and hundreds(if not thousands) of successful settlements, I know HOW to achieve the best outcome for my client. Thoughtful and proper wording of offers is essential and includes positioning my client in the creditor company's eyes as deserving of flexibility with payment arrangements.
Additionally, I often already have a very good working relationship with many commercial creditors and their agents or attorneys. In each jurisdiction around the country, there are a few primary creditor law firms and I have dealt with most at one time or another over the years. I know what to expect from them going into a negotiation and they trust that my clients will follow through with payment based on my representation.
Finally and perhaps most importantly, my service relieves my clients of the burden of dealing with past due or disputed claims. Most of my clients are small to medium size business owners working full time to make their operations successful. Dealing with creditors and their agents takes time away from generating revenues and growing a business.
My fees are always reasonable and my goal in each settlement negotiation is to SAVE my client substantially more than my fee.
Scott F. Soape
Good question... and one I am always happy to explain.
To begin, having over 22 years of professional debt settlement negotiation experience and hundreds(if not thousands) of successful settlements, I know HOW to achieve the best outcome for my client. Thoughtful and proper wording of offers is essential and includes positioning my client in the creditor company's eyes as deserving of flexibility with payment arrangements.
Additionally, I often already have a very good working relationship with many commercial creditors and their agents or attorneys. In each jurisdiction around the country, there are a few primary creditor law firms and I have dealt with most at one time or another over the years. I know what to expect from them going into a negotiation and they trust that my clients will follow through with payment based on my representation.
Finally and perhaps most importantly, my service relieves my clients of the burden of dealing with past due or disputed claims. Most of my clients are small to medium size business owners working full time to make their operations successful. Dealing with creditors and their agents takes time away from generating revenues and growing a business.
My fees are always reasonable and my goal in each settlement negotiation is to SAVE my client substantially more than my fee.
Scott F. Soape
Friday, September 20, 2019
Flat Fee vs. Percentage of Savings
My associates and colleagues know I have been a long-time proponent and advocate for flat fees and/ or capped fees in this profession.
When I created my company in 1997, there was very little competition in the Commercial Debt Resolution profession and most everyone was charging a percentage of savings for settlements. That percentage typically ranged between 25% to 35% of the amount saved on a claim for a debtor company. The sales pitch went something like:
"Hey, this puts me on the same side of the table as my client since the more I save them, the more I make. So, my incentive is to save them as much as possible. All parties win with a successful settlement."
Makes sense, right?
Well, I quickly found the EXACT OPPOSITE was usually true.
Consider a client with a $100,000 claim and a fee set at 30% of savings. If I can negotiate a $40,000 settlement, I just saved my client $60,000 on the claim. Unfortunately, I just created a new debt with my $18,000 fee ($60,000 x .30). Sure, the net savings for my client is $42,000 but now they have to figure out how to pay me $18,000.
My initial resolution to this issue was to cap my fee and continue to charge a percentage of savings. This helped to avoid any fee "sticker shock" for my client at the end of settlement negotiations. I still utilize this fee structure for certain cases where it makes sense and it continues to be well received.
However, most of my cases are worked on a fair and reasonable flat fee basis so there is absolutely no uncertainty regarding my fee from beginning to end of negotiations. This fee is agreed upon after consulting with a prospective client and is based on the size and complexity of each case. After negotiating hundreds (if not thousands) of settlements over the past 21 years, I usually know what to expect once I gather some background on a claim. An upfront fully refundable retainer is typically required before I begin negotiations which also makes payment of the balance of my fee easier at the end of a successful settlement negotiation.
A flat fee also makes sense for cases where only a payment arrangement is negotiated with no discount.
I encourage all prospective debt settlement clients to question any proposed open-ended percentage of savings fee that does not include a cap. Nobody wants to resolve one problem debt just to create another.
Scott F. Soape
When I created my company in 1997, there was very little competition in the Commercial Debt Resolution profession and most everyone was charging a percentage of savings for settlements. That percentage typically ranged between 25% to 35% of the amount saved on a claim for a debtor company. The sales pitch went something like:
"Hey, this puts me on the same side of the table as my client since the more I save them, the more I make. So, my incentive is to save them as much as possible. All parties win with a successful settlement."
Makes sense, right?
Well, I quickly found the EXACT OPPOSITE was usually true.
Consider a client with a $100,000 claim and a fee set at 30% of savings. If I can negotiate a $40,000 settlement, I just saved my client $60,000 on the claim. Unfortunately, I just created a new debt with my $18,000 fee ($60,000 x .30). Sure, the net savings for my client is $42,000 but now they have to figure out how to pay me $18,000.
My initial resolution to this issue was to cap my fee and continue to charge a percentage of savings. This helped to avoid any fee "sticker shock" for my client at the end of settlement negotiations. I still utilize this fee structure for certain cases where it makes sense and it continues to be well received.
However, most of my cases are worked on a fair and reasonable flat fee basis so there is absolutely no uncertainty regarding my fee from beginning to end of negotiations. This fee is agreed upon after consulting with a prospective client and is based on the size and complexity of each case. After negotiating hundreds (if not thousands) of settlements over the past 21 years, I usually know what to expect once I gather some background on a claim. An upfront fully refundable retainer is typically required before I begin negotiations which also makes payment of the balance of my fee easier at the end of a successful settlement negotiation.
A flat fee also makes sense for cases where only a payment arrangement is negotiated with no discount.
I encourage all prospective debt settlement clients to question any proposed open-ended percentage of savings fee that does not include a cap. Nobody wants to resolve one problem debt just to create another.
Scott F. Soape
Thursday, June 27, 2019
Communication is Key
Many of the past due debt situations I encounter could have been avoided with better communication between the parties.
Most commercial creditors are willing to be flexible with repayment if they are kept informed of a debtor company's financial situation when times are difficult. These problems usually are the result of not being paid in a timely manner on their own accounts receivable, causing a domino effect.
When communication stops, commercial creditors have little choice but to escalate collection actions by sending demand letters, retaining outside collection agencies or attorneys and, eventually, filing lawsuits to collect. By keeping the lines of communication open and explaining the reasons for late payments, a business owner can often avoid or delay these stepped up collection actions and retain desired relationships while they work to get their finances in order.
Scott F. Soape
Most commercial creditors are willing to be flexible with repayment if they are kept informed of a debtor company's financial situation when times are difficult. These problems usually are the result of not being paid in a timely manner on their own accounts receivable, causing a domino effect.
When communication stops, commercial creditors have little choice but to escalate collection actions by sending demand letters, retaining outside collection agencies or attorneys and, eventually, filing lawsuits to collect. By keeping the lines of communication open and explaining the reasons for late payments, a business owner can often avoid or delay these stepped up collection actions and retain desired relationships while they work to get their finances in order.
Scott F. Soape
Tuesday, December 11, 2018
Settled at 10% of the Debt
A previous client recently approached me with a business related credit card debt. The collection agency pursuing the claim represented a Visa account for a national bank that my client owed over $22,000 for an old write off.
My initial skilled negotiation efforts resulted in a 65% discount if my client could make a lump-sum payment of $7,700. Under normal circumstances, this would be considered a nice settlement but my client and I knew this was an old claim and the creditor had few options for enforcing payment. It did not take long for me to negotiate an additional 10% discount for a total payment of $5,500 (25% of the debt).
Not willing to abandon my efforts despite these favorable results, I continued to press and fight for a lower amount on behalf of my client and worked my way up the chain of authority with the collection agency.
Negotiations lasted several weeks but the final result of my efforts was a settlement for my client in the total amount of $2,200 on the $22,000 debt... or 10 cents on the dollar.
Every claim is different, but each and every one of my clients may always be assured my best efforts possible to reach the lowest settlement with the most favorable payment terms on their behalf.
My initial skilled negotiation efforts resulted in a 65% discount if my client could make a lump-sum payment of $7,700. Under normal circumstances, this would be considered a nice settlement but my client and I knew this was an old claim and the creditor had few options for enforcing payment. It did not take long for me to negotiate an additional 10% discount for a total payment of $5,500 (25% of the debt).
Not willing to abandon my efforts despite these favorable results, I continued to press and fight for a lower amount on behalf of my client and worked my way up the chain of authority with the collection agency.
Negotiations lasted several weeks but the final result of my efforts was a settlement for my client in the total amount of $2,200 on the $22,000 debt... or 10 cents on the dollar.
Every claim is different, but each and every one of my clients may always be assured my best efforts possible to reach the lowest settlement with the most favorable payment terms on their behalf.
Wednesday, May 2, 2018
Suspending New Program Sales
Effective immediately, I am suspending new sales of my Business Plan System and Associate Program.
Although helping people new to this profession get up and running has been very rewarding over the years, my core practice has grown to the point I am no longer able to divide my attention between the two. Please be assured, I will continue to support and assist those folks that have already invested in my programs. Those that have previously expressed an interest but not yet purchased the material may contact my office directly if they wish to proceed.
Best wishes to all!
Scott F. Soape
Although helping people new to this profession get up and running has been very rewarding over the years, my core practice has grown to the point I am no longer able to divide my attention between the two. Please be assured, I will continue to support and assist those folks that have already invested in my programs. Those that have previously expressed an interest but not yet purchased the material may contact my office directly if they wish to proceed.
Best wishes to all!
Scott F. Soape
Sunday, March 4, 2018
Another Company Rescued!
It is always gratifying when I am able to assist a business owner with problem debts and lessen their financial burden. Often, this can make the difference between continuing business operations or closing the doors.
A case I closed this week not only allowed a business to remain open, it also allowed the owner to avoid declaring personal bankruptcy.
My HVAC client was dealing with a $213,000 business debt that had escalated to a lawsuit... and the owner was on the hook personally. A judgment would have devastated the company and the owner.
I was able to convince the commercial creditor to accept an out of court settlement in the total amount of $30,000, payable in 60 monthly installments of $500 each at 0% interest.
Considering they could have been awarded attorney fees claimed of $25,000 in addition to the principal debt, court costs and back interest, total savings to my client was over $210,000.
Of course, not all of my negotiations work out this well but I have maintained a near 100% success rate over 20 years assisting my commercial clients with their problem and disputed debts.
A case I closed this week not only allowed a business to remain open, it also allowed the owner to avoid declaring personal bankruptcy.
My HVAC client was dealing with a $213,000 business debt that had escalated to a lawsuit... and the owner was on the hook personally. A judgment would have devastated the company and the owner.
I was able to convince the commercial creditor to accept an out of court settlement in the total amount of $30,000, payable in 60 monthly installments of $500 each at 0% interest.
Considering they could have been awarded attorney fees claimed of $25,000 in addition to the principal debt, court costs and back interest, total savings to my client was over $210,000.
Of course, not all of my negotiations work out this well but I have maintained a near 100% success rate over 20 years assisting my commercial clients with their problem and disputed debts.
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