COVID, Commercial Collections & More for 2021
Looking back over the last year, it’s mind-boggling to look at everything the world has been through. We have gone from World War 3 jokes when the United States killed an Iranian Major General to the world effectively shutting down with the raging COVID-19 pandemic. From small to big catastrophes, we have seen it all. But what does 2021 bring us and how does that affect your business?
With vaccine rollouts continuing to be pushed, businesses are returning with little to no restrictions. Texas has been leading the charge in this facet with their governor abolishing the mask mandate and allowing all businesses to operate. Many other states have begun following suit and resuming operations at nearly 100% capacity.
What does this mean for your business and your debt recovery solutions?
Open Invoices Available for Collections
Have open invoices that you have been putting off for some time due to COVID? Commercial debt collections became much more of an ethical issue as the pandemic ramped up. Many of our clients became much more understanding of delinquency as nearly every industry faced struggles to get this up and running.
Now with a return to normalcy, we have already seen cash flow increase for our clients and borrowers alike! The excuse of COVID halting businesses may be a real one, but it is becoming less frequent. To be more understanding, our team takes an audit approach to look at the financials of the borrowers and see where the struggles lie. Instead of bleeding your clients for cash, we find solutions that allow them to resume business comfortably while making you whole.
Alternative Lending Will Increase
Traditional lending channels through banks have become rigorous for many businesses. PYMNTS.com cited that 27% of small businesses have already used an alternative lending platform in 2018. After feeling the ill effects of COVID, many people’s credit scores are not up to par and may rely on these platforms. Traditional bank loans will become less viable and new avenues will have to come into play.
Merchant Cash Advance (MCA) loans will become a much more popular option soon. These loans come with easy payback options, as they take a percentage of the income from your credit card swipes immediately. Their loan requirements are also much less, providing more relaxed credit requirements and varying balance sizes.
Remote Workplaces Will Continue
The transition to remote workplaces became a necessity as we managed our distance between one another. For many people, remote work is still a reality and will continue to be a reality. Review42 reports that 25% of companies are looking to move 10% of their workforce to remote positions permanently following the pandemic.
This could mean a couple of different things for your company. From a logistics and financial point of view, the shift to remote work cuts costs on major overheads (rent, utilities, etc.). It’s estimated that mid-size companies can save up to $11,000 per person sent home to work remotely! While working from home has its own set of obstacles,
From a collections standpoint, this means that a company that once had the ability to transfer calls throughout the office instantaneously now faces communication dilemmas. Now that can make it easier to get the right person on the phone because gatekeepers may not want to deal with tracking down the correct party. However, some companies will keep their information private and make it increasingly difficult to find backdoor ways to talk to the right people.
Our collectors have been trained on how to deal with finding the correct decision maker and dealing with pesky gatekeepers in these situations. If this seems to be a constant in your AR team’s life, it might be time to leave it in the hands of a professional.
People trying to get out of debt
This one can come as a surprise to some, but it ties back into our alternative lending point above. As an agency, we have been having old debtors call back into our offices looking to pay off their debts. While we pride ourselves on being one of the top agencies in the world, we also know when clients have no ability to pay on a debt.
Through tactful conversations, we have encouraged these debtors to eventually come back around and pay their debts. Often, these people are trying to clean up their credit scores to gain future access to bank loans and capital. What we can see coming from these talks is that debts that were previously written off will slowly start trickling in. This money is essentially found money for you at this point, but it requires a hand to go in and credit reports these companies.
2021 is going to be a big year for an economic comeback. Businesses will have the opportunity to open back up barring restrictions from national and local governments. From companies looking to recover from the mess of 2020 to others looking to expand in a big way, there is no shortage of potential in business and commercial collections.