In late January, we let Associate Michael Lamm escape a Northeast snow storm to attend the 37th annual International Association of Commercial Collectors (IACC) conference in Ft. Lauderdale, Fla,

He was able to catch up with many owners of commercial agencies and law firms to learn how the economy and market conditions were impacting their businesses. Most were in good sprits, seeing increased placement volumes with little impact to overall liquidation results. Michael was surprised (and happy) to hear that liquidation rates have been minimally impacted by the ongoing economic turbulence.

After the show, Michael had some predictions for what lies ahead for the commercial collections market:

• Placement volumes are expected to continue to increase throughout the year as more companies seek to reduce financial stress by outsourcing collections.
• Commercial creditors will seek to offset expected increased bad debt expense by outsourcing the collection of their delinquent commercial accounts earlier in the recovery cycle.
• Recovery rates are expected to decline at some point during the year as recessionary conditions and tight lending markets force more companies to seek Ch. 11 protection or liquidate altogether; however, this effect should be offset by the increase in placement volumes.
• M&A activity is expected to continue as buyers seek to establish platforms in the commercial market to take advantage of cross sell and growth opportunities. Since very few sizeable platform acquisition targets exist, prices will remain at desirable levels for sellers.
• Strategic buyers including the commercial trade re-insurance companies will continue to pursue acquisitions.
• Commercial debt buyers will garner significant attention, provided that they have a true niche specialization, a strong flow of new purchase opportunities and an effective debt liquidation capability.

What are you seeing in commercial collections? We’d like to know how you are fairing in the market and what opportunities you are seeing. Feel free to contact Michael Lamm by email or call 240-499-3808. Or, weigh in with your comments to this blog below.