Twenty-five years ago, Robert Boehm and his sons Brett and Adam founded TBF Financial (TBF) with the goal of pioneering commercial debt buying in the equipment leasing industry. The company succeeded and now equipment finance businesses routinely sell off all or a portion of their distressed accounts after charge-off.
“Debt buying was mostly unheard of in the commercial finance industry before TBF launched in 1998,” said Brett Boehm, now CEO of the company. “Our principals believed we could buy charged-off equipment leases for prices that would be attractive to sellers yet also provide TBF with a margin of profit.”
This business model worked, and today TBF customers not only include equipment finance companies and banks but also fintechs, online small business lenders and merchant cash advance (MCA) businesses.
“Debt buying and selling has become an established practice in commercial finance,” Boehm explained.
Headquartered on Chicago’s North Shore, TBF acquires commercial debt from finance businesses across the nation. The company has managed commercial debt through every economic cycle over the past 25 years, including previous inflationary markets, he noted.
How It Works
TBF buys pools of non-performing commercial accounts after they have been worked internally and reached the charge-off stage. These accounts include loans, equipment leases, lines of credit, MCAs and commercial credit cards. They may have personal guarantees or no personal guarantees, be secured or unsecured, pre-agency or post-agency, or pre-litigation and/or reduced to judgment.
Boehm said the company offers competitive pricing that is based on decades of historical data and the assets’ fair market value. “We always have cash on hand to close the deal immediately,” he added.
For sellers, the key benefit is immediate cash at closing but that’s not the only consideration. Selling off all or a portion of commercial debt allows collections teams to focus on accounts earlier in the delinquency cycle when recoveries are more likely. It also reduces the risk of lower payoffs in the future, Boehm said.
What happens to accounts post-sale? TBF provides assurances that the sellers’ debtors will be treated fairly and respectfully.
“We work professionally with debtors over time to collect as much as possible. Our hope is that the debtor will someday be in a better position to do business again with the seller as a customer in good standing. We also maintain accounts and do not resell them, which enables sellers to repurchase an account should any significant changes occur post-sale,” Boehm said.