National Loan Exchange (NLEX), a third-party loan sale advisor, is interested in working with more powersports lenders, Senior Vice President of Sales and Marketing Van Millis told Powersports Finance.
NLEX works with financial companies to facilitate the buying and selling of charged-off loans. The company provides services for real estate, consumer, student and automobile loans, credit card accounts, and equipment lease portfolios.
NLEX closed $3.4 billion worth of transactions last year, Millis said. However, the company doesn’t track the specific amount of business it does in the powersports industry. NLEX works with two large powersports lenders and likely does the “majority” of the charged-off loan sales in the powersports space due to the size of those lenders, Millis said.
The company is seeking more powersports lenders and views debt selling as a tool that the industry has not fully utilized yet.
“Selling charge-offs is a financial tool that only a few powersports lenders are leveraging,” Millis said. “It is an opportunity to generate immediate revenue versus small collections and recovery revenue over a long period of time.”
Lenders sell charged-off loans to increase revenue on the back-end, which allows them to devote resources to other areas of the business. Lenders selling debt should consider factors related to compliance and financial issues.
“[Lenders] need to understand industry standard contract terms and post-sale expectations such as put-backs for ineligible accounts, forwarding direct payments, and supplying supporting documentation,” Millis explained. “Lenders should also know what information should be reviewed when qualifying potential debt buyer partners. Basic items to review before working with any given buyer include a CFPB complaint portal search, Better Business Bureau grade, negative media searches, regulatory watch lists and sanctions.”
Edwardsville, Ill.-based NLEX has a vetted network of more than 400 buyers.