A debt purchase offer needs more than a cents-in-the-dollar comparison
Assess proposed sale of a large receivable including seller warranties and residual risk rather than settlement collection percentage.
Corporate Recovery Partners
01 / 06
A quick purchase price may carry conditions
A business offers to buy your substantial unpaid account at a discount. Before accepting, obtain advice about the proposed transaction and the rights you are being asked to transfer. The price is important, but so are warranties, refund conditions, costs and obligations that may remain with your business. Do not treat a headline percentage as the complete commercial outcome.
Imagine a supplier considering a purchase offer for several invoices owed by a major customer. Reconcile the invoices, credits, disputes and any previous payments. Identify guarantees, security or other related rights for legal review. Do not assume that every right can be transferred in the same way or that the purchaser's standard description accurately matches your account.
business.gov.au recommends understanding contractual terms before signing and obtaining advice where needed. Ask the lawyer to explain the seller warranties and any circumstances in which money could be reclaimed from you. Give the purchaser accurate information through an agreed process. A sale described as final may still contain specific obligations that need to be understood.
Show the proposed price after stated fees and deductions, the payment date and any conditions before completion. Compare it with realistic alternatives using professional advice. In the supplier's example, a higher headline offer with uncertain payment or extensive retained exposure may differ materially from a lower firm proposal. Avoid assuming either is preferable without reviewing the complete terms.
Ask what documents and notifications are required and who will handle customer communications. Preserve confidentiality and provide information only through authorised arrangements. Do not continue collecting or negotiating the account independently after a transaction without understanding your authority. Clarify how payments arriving during the transition will be handled and recorded.
Keep the signed documents, payment evidence and advised accounting treatment together. Confirm which rights and obligations remain rather than deleting the file once a receipt arrives. Selling a large claim can be a significant recovery decision. It needs a supported comparison of price and retained risk, not simply relief that someone has offered immediate money for an overdue balance.
