Common debt traps for business

A debt trap is a financial ploy that is designed to keep businesses in debt for them to continuously make money off people or establishments that are unable to clear their debt. Debt traps are often set by financial institutions like lenders who structure their business in such a way that they can exploit loopholes in consumer credit laws to avoid regulation. According to Brennan & Clark LLC, these establishments are technically legal, but they do pose a high chance of keeping people in debt due to their practices. Here are some of the most common debt traps for businesses.

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Payday loans: Whether you’re a single parent trying to make ends meet or the owner of a small business, payday loans are notorious for keeping their clients in debt. They do this by first charging an establishment fee of up to 20% and a monthly fee of 4% of the amount borrowed. So if you borrowed $1,000 from a payday loan creditor, they expect you to pay $1,240 within the next month.

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Blackmail security: It’s often policy for some creditors to have their lenders sign off on an asset to guarantee a loan. Usually, the items that are put up are more expensive than the loan itself so that when a loan defaults, the creditor can still make money off the asset. But according to Brennan & Clark, dubious security firms choose cheaper assets, but assets that are vital to your business. Besides this, they also have a steep minimum loan amount that could go as high as $2,000.

Brennan & Clark LLC is a business collections firm with over 30 years of experience. It maintains membership in the Commercial Collection Agencies of America. To read more about finance, visit this blog.

A lot of companies struggle with clients who are often late when it comes to making payments. This financial conundrum can effectively ruin a company’s cash flow and cripple operations. Still, it may be hard to believe that some companies find it hard to pay within the date marked on contracts. According to professional debt collectors at Brennan & Clark LLC, there are several reasons why clients fail to make their payments on time.

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One of the biggest reasons why clients become delinquent on their debt is because of multiple debts and prioritization. If a company is currently paying off multiple debts, it could prioritize bigger debts rather than take on all of them at the same time. It’s a well-known repayment strategy that is effective when it comes to eliminating debt. However, if your company is at the end of the pecking order, it might take a while before they get to pay off their debt to your company.

Another reason why clients turn delinquent is the structure of their finance department. Multinational companies, as well as other large corporations, are known for finance and accounting departments having their own processes. This could mean that the payment for your services is still being fulfilled by a department separate from the one you were in contract with.

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The third reason why clients can’t pay on time falls on the company that owes money not having flexible payment options. Some companies only accept checks or bank transfers. According to expert collectors at Brennan & Clark LLC, some clients are more than willing to make cash payments or go through other means of credit transfer just to settle their bill.

Brennan & Clark LLC is a business collections firm with over 30 years of experience. Based in Villa Park, Illinois, the agency was founded in 1980. It maintains membership in the Commercial Collection Agency Association, the National Security of Premium Insurance Auditors, the Insurance Accounting and Systems Association, and the International Association of Commercial Collectors. To know more about the company, visit this website.

What it means when collection agencies are calling your company

Not all companies have the same in terms of financial stability. Many companies are backed by shareholders which can easily funnel resources into the company when needed. Then there are those companies who have a hard time keeping up with expenses.

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Companies with financial struggles could possibly miss making payments to their suppliers, or companies whom they have hired to render services. According to collection experts at Brennan & Clark LLC, companies who are 90 days delinquent on their payments can be subject to collection calls from third party collection agencies. When your company starts receiving these calls, it can mean any of these multiple situations.

Firstly, the company your establishment owes credit to is serious regarding collecting the debt. If they are willing to hire a third party debt collection agency, they are also willing to pursue legal action as well.

Secondly, accredited third party collection agencies often have connections to credit bureaus and can report your company’s tardiness. This can affect your company’s line of credit by giving it a bad score, limiting chances of future loans from creditors.

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If the collection call your company receives is from a personnel of the company to whom you owe money, you run the risk of aggravating the situation and possibly losing a trusted supplier. Tension tends to mount when dealing with financials. It is possible that the company you owe money to is in dire need of the payment due to their financial situation as well.

According to professional debt collectors from Brennan & Clark LLC, avoiding collection calls is the last thing you would want to do. Collection agencies have years of experience in dealing with these types of situations. They can also help design payment plans which can benefit both parties.

Brennan & Clark LLC is a business collections firm with over 30 years of experience. Based in Villa Park, Illinois, the agency was founded in 1980. For more insightful reads on debt collection, visit this website.

How to politely remind clients of their unpaid bills

Businesses have to know how to properly collect debt from their clients. Communications can be a tricky subject, especially for those who aren’t the best when it comes to words and verbal communication. And with a topic as sensitive as debt or credit, caution must be taken so as not to damage the relationship between client and creditor or supplier.

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According to the experts at Brennan & Clark LLC, a debt collection agency, one has to be gentle yet stern when it comes to collection calls. If your client is running delinquent, here are polite ways to remind them of their unpaid bills.

The best way out of this situation is to not be there in the first place. If the credit to be paid is rather large, you could send an email a week before the due date to remind the company of their bill. Here, you can also include their various payment options. The more options your company has when it comes to accepting payments, the easier it would be for clients to repay their debt.

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On the due date, inform your client that the payment has to be made that day. To help them in this situation, it’s always better to add all the details necessary to the message. This includes the invoice number and the date it was sent, the total amount, as well as payment options. You should also end the message with a note soliciting clarifications or further questions.

After the due date has passed and no payments have been received, continue sending collection notices. According to Brennan & Clark LLC, your tone needs to be firm during this stage. You should also attach a copy of the invoice, as it is possible for the invoice to be accidentally lost or deleted, especially if it is a digital one.

A business collections firm based in Villa Park, Illinois,Brennan & Clark LLC has been a leader in the industry for over 30 years. For more reads on commercial debt collection, visit this website.

Overcoming (and recovering from) a low credit rating

Keep in mind that there are no quick fixes to a history of bad credit. What’s important when rebuilding your credit is having the patience to work on it, because it entails hard work and discipline, says business collections agency Brennan & Clark LLC.

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Don’t be fooled by companies that make promises that they can make you start all over and completely do away with past debts. This simply isn’t true. If anything, such businesses are illegal. These fraudulent services often tell people that bad credit history will severely impact new credits, but there are sound (and legal) ways to recover and rebuild your credit file.

You’ve to first acquire a copy of your credit report, which you can easily do online. Assuming that the debt is overwhelming, it’s advisable to seek out a credit counselor who can help you develop a sound debt repayment plan, which begins with scheduled payments. Just remember that while this counseling move doesn’t reflect on your credit report, it is the necessary first step toward attaining full recovery.

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You can, of course, opt to rebuild on your own and treat your credit strategy the way you would approach your budget. But it still is more advisable to go for an official debt repayment plan via debt counseling as this will affect your credit status if creditors report that your account in currently undergoing rehabilitation via a repayment plan.

Assuming you are keen on rebuilding bad credit by yourself, gain credit by looking for local businesses, credit unions, and banks with lower credit standards as these can help establish that you are now paying your bills on time, adds Brennan & Clark. But make sure that these grantors report to top U.S. credit bureaus so that the history is tracked and reported properly.

Brennan & Clark LLC is a business collections firm that has been in operation for over 30 years. The agency is a member of the Commercial Collection Agency of the Commercial Law League. Visit this blog for similar tips and insights on money management.

Why you should opt for a certified collections agency

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A sound and effective collections agency is premised on professionalism. Business owners should all go for one that is certified, as certification is the banner of training, experience, and expertise. After all, collection is a craft that needs to be developed, implemented, and approved with the utmost care.


A certified collections agency is backed by the Commercial Collections Agency of America (CCAA), which guarantees that all members of the collections body are certified and therefore adhere to the strict rules and regulations of the umbrella agency. The CCAA is a nonprofit organization that works for the best interests and goodwill of customers while upholding the integrity of the collections industry.

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Some of the advantages of getting a collections agency approved by the CCAA are prompt remittance of funds to creditors, a minimum surety coverage of $300,000, the maintenance of separate trust accounts for collected funds, and, in general, a better method for attaining maximum dollar recovery.


Moreover, collections agencies under the wing of the CCAA abide by the umbrella organization’s strict codes of ethics, attend its annual seminars and training, will provide the assistance of a legal counsel if necessary, and creditors can directly get in touch with the executive director if complaints arise.


For over 30 years, Brennan & Clark has been aiding businesses in achieving well-defined goals for their collection process, evaluating all internal procedures, and implementing improvements and guarantee better collections results. Brennan & Clark is a proud, certified member of the Commercial Collection Agencies of America. For similar reads, visit this blog.