Certainty of Execution
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Garnet Capital is a financial services company specializing in managing loan portfolio sales and providing valuation services.
There is naturally a lot of concern and focus on debtors during an economically turbulent time. One must also ask what creditors intend to do about their own portfolios when things start to get a little shaky. The increased concerns about the economy have meant that many debtors have pulled back on their credit card usage, and most are paying down their current balances. It turns out that this is a unique reaction to an economic shock.
One area of modern finance that is not spoken about nearly enough is how a flood of government-back PPP loans has impacted the overall economic landscape. This is a brand-new product to hit the market in response to COVID-19, and some industry players have wasted no time figuring out how they can profit from it. The mid-tier banks in particular have done well by collecting fees on these loans. Big banks also got in on the action, but the mid-tier players have made it a central piece of their ongoing operations.
Selling underperforming assets to debt buyers surely sounds like a great deal for banks, credit unions, and credit card issuers to accelerate cash flow and get some less than ideal accounts off their books. However, most do not want to put themselves in a position where they get periodic boosts to their balance sheet via these sales but are unable to maintain steady or consistent profits because they are uncertain as to the future price of sale pools. Instead, some are opting to use a "forward flow" agreement to create a more consistent income flow from the sale of these debts.
The Auto Finance Summit draws attendees from the full spectrum of lending. Participants can expect to connect with a diverse group of executives from both prime and nonprime banks, credit unions, floorplan lenders, thrifts, dealerships and service providers through our on-site networking opportunities, the matchmaking algorithm, and through the virtual event platform.
