Reasons to Work With a Debt Broker

Categories: Education|

If you’re looking to sell or purchase debt, you may not really know where to start. While these practices have become increasingly popular in the USA, it’s perhaps not as common to buy or sell debt in the UK. For this reason, it’s often a good idea to approach a debt broker, who can help streamline the process. We’ve explored some of the benefits of using a debt broker below!

What is a Debt Broker? 

Before we look at a few of the advantages of working with debt brokers, first let’s discuss exactly what a debt broker is. Essentially, a debt broker is an organisation that represents both buyers and sellers in debt sale transactions. They have a network of lenders and debt collectors and will help the former sell debt to the latter.

Debt tends to be sold in portfolios, which is a collection of debts that are grouped together, usually because they share a particular attribute. This could be anything from the average length of time the loan has been defaulted to the type of credit originally borrowed, such as payday or personal loans. Portfolios are generally sold at pence to the pound, as it’s unlikely that the debt collector will be able to reclaim the total balance. They therefore only have to collect a fraction of the total outstanding debt to make a profit.

Benefits of Working With a Debt Broker: Buyers

If you’re looking to purchase debt portfolios as part of an investment opportunity, working with a broker comes with lots of advantages. Perhaps the most obvious benefit is that you can easily find suitable portfolios, without having to waste hours searching for them yourself. Other advantages include the fact that you can compare options with ease, and that you know that you’re working with experts in the industry. We’ve explored each of these benefits in more detail below: 

Find Great Portfolios

Finding a great debt portfolio that you’re confident you’ll make a return on can be difficult. You could end up spending hours searching for the right one. So why not use a broker, so that you can choose between a large number of portfolios, all in one place! Using services like EverChain UK, you can save a lot of time searching for suitable portfolios.

Compare Options

With EverChain UK’s advanced filtering tools, you can not only quickly and easily find portfolios that match your investment criteria, you can also set alerts to be notified when any similar portfolios are added to the network. A debt broker allows you to compare options with ease.

Work With Experts

Another benefit of working with a debt broker is that you’ll have access to insider knowledge. You can speak with our team of experts at any stage of your buying journey, and we’ll be happy to assist you. You can also rest assured that you’d only be buying portfolios from trusted sources – each of our sellers goes through pre-sale due diligence as well as post-sale compliance checks. 

Benefits of Working With a Debt Broker: Sellers

As a lender, you may not be an expert in debt collection, as that won’t be the reason you started your business. So if you’re thinking about selling your debt through a broker, there are a few obvious benefits, such as not needing to chase borrowers moving forward. Other advantages include getting an instant monetary return, as well as saving time comparing debt collection agencies.

Save Time

If you’ve never sold a debt portfolio before, you may not know which companies to approach, nor which debt collectors will offer a good price. That’s why many lenders choose to let debt brokers like EverChain UK do all the hard work for them! We’ll help you securely load your portfolio and then market it to our pre-vetted buyer network. That way, you won’t have to compare various debt collection agencies yourself, to see which one will offer the best price for your debt portfolio.

Quick Cash Injection

Another great thing about debt sale is that you can reclaim some of your funds instantly. After trying to collect certain debt for an extended period of time, it can be a relief to sell it on to a third party. 

You can also be confident that you’ll be working with compliant and qualified buyers, and EverChain UK will give you everything you need to select the right buyer for your portfolio. Our platform allows you to review bids, as well as look at things like buyer/agency complaint ratios and trends, all before selecting a suitable buyer. 

Stop Wasting Resources 

Rather than continuing to put strain on your resources through bad debt, you can sell your debt and allow your staff to focus on early stage collections. This will not only mean a happier and more engaged workforce, it will also introduce a real consequence to your customers, which in turn should lead to better customer engagement and increase your collections rates.

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