Acquisition of bad debts (payment within 7 days)

Our partner has been established to address the substantial gap for debt acquisition in the UK mid-market. They are at the forefront of debt acquisition in the UK specialising in distressed debt and leading the way in offering to buy bad and doubtful debts including debts due from insolvent companies. They have developed strategies for profiling and improving their debt portfolio specialising in the recovery of doubtful debts by buying in volume.

They are specialist debt buyers and will consider the purchase of any portfolio of bad and doubtful debt provided that it has been written off or a full provision made against the debts and are no more than 3 years old. In fact, they will buy all your bad debts for a fixed sum payable now.

Debt purchasing offers many benefits, with the overriding benefits being:

  • removal of bad debts from a balance sheet
  • improved cash flow, as they pay a fixed sum now

Writing off debt (whether by selling the debt or simply writing it off the balance sheet) also allows companies to claim VAT relief on debts. However, whether for tax or auditing purposes, businesses are sometimes required to provide evidence that a debt is irrecoverable for it to be written off the balance sheet. Our partner is a wholesale debt purchaser.

They purchase bulk debt and portfolio debt, both secured and unsecured, from banks and other credit service providers. Those debts are profiled against their in-house models. They have in-house expertise in managing a performing debt portfolio and recovering non-performing debts.

Our partner performs data modelling in-house on primary, secondary and tertiary data segments to inform a strategy to maximise their portfolio return.

Before they agree to purchase your debts, they:

  • undertake an assessment of the character of the debt and the underlying contract at their own cost not yours
  • investigate the individual or company that owes the debt to determine the status of the debt
  • will be able to indicate an approximate figure that they would pay for your debts and buy the debts all within 7 days

Once all enquiries are complete and they offer to purchase the debt, contracts are prepared by their in-house legal team for the sale.

Our partner pays 100% of the agreed value on signing the contract.

Worked examples:-

Case 1

  • media focused business with debts written off of £524k
  • individual bad debts totalled 30 incurred over the last 3 years
  • offer made of £12k for the portfolio of debts

Case 2

  • distributor with significant bad debts of over £2 million incurred over the last 4 years (reduced to 3 years)
  • average bad debt written off was £78k; the maximum exposure to any single debt was £629k
  • offer made was £150k for the debts written off in the last 3 years

Case 3

  • manufacturing business with just two bad debts totalling £32k
  • offer was agreed and accepted at £4k. Paid by transfer within 7 days

Specialist in bad debts

We approach each client on an individual basis offering assistance in order for our partner to buy all bad and doubtful debts over the preceding 3 years provided that such debts have been written off or will be written off for tax purposes; there are no bad debts that they do not consider purchasing.

Bad debt

We define a bad debt as an amount that is written off by the business as a loss to the business and classified as an expense because the debt owed to the business is unable to be collected, and all reasonable efforts have been exhausted to collect the amount owed. The debt is immediately written off by crediting the account and therefore eliminating any balance remaining in that account. Formal insolvency procedures included:-

  • administrations
  • voluntary arrangements
  • receiverships
  • liquidations

Doubtful debt

Doubtful debts are those debts which a business is unlikely to be able to collect. The reasons for potential non-payment can include the appearance of financial distress within a customer’s operation. It is prudent to add this debt to the doubtful debt reserve. This is done to avoid over-stating the assets of the business as trade debtors is reported net of doubtful debt.
When there is no longer any doubt that a debt is uncollectable the debt becomes bad.

Doubtful debt reserve

Also known as bad debt reserve, this is a contra type account listed within current assets section of the balance sheet. Doubtful debt reserve will hold a sum of money to allow a reduction in the accounts recoverable ledger due to non-collection of debts. This can also be referred to as the allowance for bad debts. Once a doubtful debt becomes uncollectable the amount will be written off.


We purchase bulk debt and portfolio debt which is unsecured, from businesses. Those debts are profiled against our in-house models. We have in-house expertise in managing a performing debt portfolio and recovering non-performing debts. We perform data modelling in-house on primary, secondary and tertiary data segments to inform a strategy to maximize our portfolio return.

Cash flow is the lifeblood of any business and is seriously adversely affected by bad and doubtful debts.

Selling debts results in:-

  • improved cash flow
  • VAT relief
  • payment for bad debts which would otherwise be irrecoverable


  • debts must be owned by the company selling


  • debts which have been insured unless reassigned
  • debts which are disputed

Contact us now for an immediate assessment of your debts.