Many commercial lenders provide their own backroom. All debtor credit approvals and verifications are done in-house to provide continuity and micromanagement of the portfolio. Workouts are also handled by in-house staff, often while trying to fund other clients. Other lenders choose to outsource all or part of the process. In any case, Credit Officers must always ask themselves: Am I managing this risk effectively? Is my borrower viable? Are the receivables going to be paid?

We have many years of experience running a backroom operation. In an effort to address this concern, Baltimore Credit & Collection Services has introduced the new Commercial Lender's Program this year. This program provides support to commercial lenders in a variety of areas:

• Backroom Services: Services include debtor credit evaluation, invoice verification (both pre-funding and on-going), portfolio evaluation, underwriting. These services can be especially useful during funding crunch times when the borrower needs money immediately.
  
  
• Field audits: A/R audits, A/R aging analysis, borrowing base monitoring, inventory analysis. BCC$ will provide the "extra set of eyes" to monitor collateral when occasional on-site checks are desired, but a full audit might not be needed. We bridge the gap to ensure you are properly securitized against loss.
  
  
• Debt Collections: This is where Baltimore Credit & Collection Services can be the most useful. In workout scenarios, we hit the ground running to provide maximum return and reduce losses. The lien against the A/R that you hold becomes less valuable with time. After a few months, it becomes very difficult to collect out on bad debt. We have fifteen years debt collections experience, and know how the game is played.
  
  But we can also help with on-going collections issues. Are you lending against A/R? Do you have a lien against the receivables? How do you collect on the current-90 day A/R?
  
  With non-recourse factoring (or lending against A/R in a borrowing base), the receivables stay with the lender at 90 days and it is incumbent on the lender to collect. Statistics show that in-house collections efforts are only effective 70% at ninety days and 50% when the receivable ages to six months. Are your margins large enough to absorb this kind of loss?
  
  Even when invoices are recoursed back to the client, the lender still has a financial interest in ensuring that the invoice gets paid. All too often the recoursed debt is forgotten once it reverts back to the borrower. A lien on A/R becomes less valuable as bad-debt accumulates. You want to make sure that your borrower remains a going concern.
  
  BCC$ bridges the gap between lender and borrower. We collect on behalf of the lender on non-recourse loans, and on behalf of the borrower with recourse lending. A third-party full collection agency is always more effective.

 
 
© 2010 Baltimore Credit & Collection Services, Inc. All Rights Reserved.