The Collection Advisor

What Business Owners CAN Do—Right Now

Posted by Brian Summerfelt on Mar 13, 2020 4:05:25 PM

I started writing this blog post a couple weeks ago. At the time, tourists were enjoying gelato at the Trevi Fountain. Today Italy is in a self-imposed national lockdown - isolated from the rest of Europe to contain the spread of COVID-19; the novel coronavirus. Italy is more or less offline for the time being. What’s happening to debt, like mortgages in Italy? How do people keep their financial obligations if they can’t leave the house to work? Italy’s solution is to freeze mortgages. Mortgage traffic simply stops for the duration of the national quarantine. And nobody knows how that’s going to turn out. File that under “wait and see.”

Closer to home, sports fans are on a cold-turkey diet, with the NHL, NBA and MLB suspending their seasons within a day of each other. Ontario school kids are getting a two-week extension of spring break. Family schedules, daycare and transportation costs are going to pinch at a time when work itself might be in jeopardy. Still, we must remind ourselves that those are just inconveniences compared to a pandemic worst-case-scenario.

The original version of this blog post started with the question, “What would it take for the Bank of Canada to make a half-percent cut in one day?” COVID-19 and an oil production war between Russia and Saudi Arabia are pieces of the answer—leading to two rate cuts since the start of the month.

Just a weeks ago the European Central bank said it was focused on the COVID-19 risk to economies and markets. Central banks are interested in a different kind of virus: debt. The European Chamber of Commerce surveyed its members. 90% say they’re feeling a medium to high impact from the coronavirus outbreak. Half expect business to drop by 10%, and a quarter expect business to drop by 20%. The recovery time-frame is YEARS.

Six months ago the worst business news on offer was Boeing’s problems fixing the 737-800 MAX. It affected air travel because the entire industry was suddenly over capacity for seats. Now rather than worries about not enough airline capacity, the situation has flipped to so much excess capacity that airlines are flying empty planes to retain access to lucrative routes. Airlines are huge customers to maintenance, food and beverage, and fuel suppliers. That’s just one industry. Everyone will be affected by COVID-19.

One-third of the world’s manufacturing capacity remains in China. While production and shipping is slowly returning to normal, vendors and customers are scrambling to redraw global supply lines. Distributors have worries because supply contracts are in flux — the effects and ripples will hit in weeks or months. It’s an acute problem with lasting effects.

The pipeline protests and rail blockades of a few weeks ago barely make the paper anymore, let alone the front page. Even so, “Canada runs on rails,” is as true today as it was when they drove the last spike in Craigallache, BC. Slowing rail traffic does the same to the Canadian economy. It’s an issue, but from a business perspective it couldn’t have come at a worse time. Investment fears will linger for years.

The debt bubble I’ve been warning about is rearing its head. Half of Canadian consumers are $200 away from missing bills every month while taxes and government fees are on the rise due to austerity. An increase in property taxes will be enough to push some households into negative cash flow. The consumer debt crisis is persistent, and deepening. This isn’t a years-long issue. This one is deeply engrained. And it affects every business in Canada.

If any one of these events happened five years ago, we should have been shocked; things have been stable and good for such a long time.

Today, the world outside my window shows a lot of negative potential: coronavirus, the resulting global economic slowdown, low interest rates, and a debt bubble. None of it is going away soon, and none of it is in anyone’s control.

But you ARE in control of something: your business.

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Topics: Collection agencies, Commercial Collection Agency, Debt Collection

4 Tips to Manage Debt Like a Role Model (Not Like the Government)

Posted by Brian Summerfelt on Feb 11, 2020 4:37:50 PM

The question of the day is “why?”

In my last blog post I wrote how 50% of Canadians are only $200 away from not being able to meet their monthly financial obligations. Half of all consumers in Canada are now literally on the verge of insolvency!

Why?

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Topics: Collection agencies, Commercial Collection Agency, B2B Collection Agency

6 Things Businesses Need to Know for the Looming Debt Apocalypse

Posted by Brian Summerfelt on Jan 27, 2020 10:14:18 AM

The news story that broke last week is unequivocal: Canada is on the brink of a debt crisis, and no one seems quite sure what to do about it.

As a people person, statistics don’t often raise my pulse. This one was impossible to ignore because of the breadth of scope. According to a national survey by MNP, Canada's largest insolvency firm, fully half of all Canadian households are now within $200 a month from insolvency. Nearly as many respondents (49%) say they aren't confident in their ability to cover expenses without going deeper into debt.
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Topics: Debt Collection, Business Strategy, Consumer Debt Collection

10 Warning Signs that Predict a Bad Debt, and How to Protect Yourself

Posted by Brian Summerfelt on Jan 13, 2020 3:21:22 PM

“Why didn’t I see this coming?”

Sadly, those are common words in the debt collection agency world. All too often, when a debt goes bad, the credit grantor has overlooked one or more clear warning signs. 

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Topics: Debt Collection, Business Strategy

4 Smart Ways to Holiday-Proof Your B2B Receivables

Posted by Brian Summerfelt on Dec 8, 2019 8:27:42 PM

It might be the season to be jolly for retailers and restauranteurs, but Christmas and the Holidays are a major challenge for many other businesses, especially in the B2B world.

For the rest of us, it’s essential to be prepared — not only for the head-spinning holiday productivity drain, but also for its frigid and desolate aftermath.

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Topics: Commercial Collection Agency, Debt Collection, B2B Collection Agency

8 Nightmarish Truths About Business Debt

Posted by Brian Summerfelt on Oct 24, 2019 12:23:20 PM

Just when you thought it was safe to deliver without payment in full...

Many things that happen in business are scarier than fiction. Entrepreneurship is a risky, stressful undertaking, and numerous dangers lurk in the dark, murky places between fulfilling a sale and getting paid.

In the spirit of the Halloween season, here are 8 truly terrifying facts about business debt, and how to ensure you keep your head about you:

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Topics: Collection agencies, Debt Collection

Introducing MetCredit USA

Posted by Brian Summerfelt on Oct 8, 2019 8:35:31 AM

Partners and clients have been asking for years when MetCredit would be expanding to the United States. Well, the time is now.

Introducing MetCredit USA.

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Topics: Collection agencies, Debt Collection

How This Federal Election Impacts Your Business—And How it Doesn’t

Posted by Brian Summerfelt on Sep 18, 2019 8:34:38 AM

Here we go again.

In 2019, four provinces held elections: Alberta, PEI, Newfoundland and Labrador, and Manitoba. Now, all Canadian voters will head to the polls to “decide the future of the country in the most important election in our history.”

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Topics: Collection agencies, Business Strategy

When the Account is Dead: 5 Sure Signs

Posted by Brian Summerfelt on Jul 22, 2019 1:33:57 PM

As professional debt collectors, we’re pre-programmed with a deeply engrained “Never Say Die” philosophy. Tenacity and optimism are defining characteristics of successful agents.

But there comes a point when you’re trying to squeeze blood from a stone: when the debtor account is beyond recovery and no amount of skill, effort or good looks is going to bring it back. When the account has flatlined.

Here are 5 unmistakable signs that an account has crossed into no-man's land:

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Topics: Collection agencies, Debt Collection, Reputation Management

Why Waiting for a Turnaround Could Kill Your Business

Posted by Brian Summerfelt on Apr 26, 2019 2:43:29 PM
 
We’re all hardwired to be optimistic. It’s a survival mechanism that gets us through natural disasters, wars and catastrophes that seem insurmountable. It is part of our irrepressible human spirit.
 
 
With a changing of the guard in Alberta and a pivotal fall election within sight for all of Canada, talk of economic turnaround is in the air. When one considers the depth and scale of the de facto problems we all face, it seems a little hard to imagine how deeply grounded this optimism can be in reality.
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Topics: Collection agencies, Business Strategy

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