Sell a business debt
When the party that owes you is a company, the value of the debt depends above all on its solvency. Here is what the buyer checks, how insolvency proceedings affect it, and how to prepare the sale to get paid more.
What a business debt is
It is a debt whose debtor is a legal entity —a company, a sole trader acting as a business, a partnership. It usually arises from invoices for goods or services, breached contracts, promissory notes or commercial rent. Selling it works like any assignment of the claim: you assign the right to collect to an investor and get liquidity today.
Solvency weighs most in the price
Compared with a debt owed by an individual, a business debt has an edge: there is public information. The buyer can check filed accounts, whether the company is active and any charges against it. An active company with up-to-date accounts and assets makes the debt worth more because collection is more likely. An inactive company with no assets or heading into insolvency makes it worth less.
Signals the buyer reviews
| Signal | Adds value | Reduces value |
|---|---|---|
| Activity | Operating company | Dormant or struck off |
| Annual accounts | Filed and healthy | Not filed or loss-making |
| Age of the debt | Recent | Near time-barring |
| Documentation | Contract, invoice, delivery note | Just an amount, no support |
| Insolvency status | No proceedings | In or near insolvency |
Insolvency proceedings: what changes
If the debtor company enters insolvency proceedings, your claim joins the process and collection follows the ranking of creditors set by law. That does not stop you selling the debt —there are investors specialised in distressed and insolvency claims— but it does affect the price, because collection depends on the estate and the class of the claim. Selling before proceedings advance usually preserves more value.
Payment terms and interest
In commercial transactions, EU Directive 2011/7/EU on late payment sets payment terms —30 days by default, up to 60 by agreement— with default interest when breached. That interest is part of the claim you assign and reinforces its value.
How to sell it, step by step
- 1
You list the debt
Debtor's sector, amount and paperwork. We never ask for personal debtor data.
- 2
You receive offers
Investors, some specialised in commercial claims, send offers.
- 3
You choose and sign
You accept the best, the assignment is formalised and the debtor is notified.
Key paperwork
- Signed contract or order with the debtor company.
- Invoices and delivery notes with proof of delivery.
- Demands by formal notice or email.
- Promissory notes or acknowledgements of debt.
- A judgment or order, if a court claim already exists.
What raises and lowers the price
Raises it: a solvent, active debtor, a recent debt, a complete file and competition between buyers. As a reference, discounts of 35%-45% are common, within a 25%-75% range. Lowers it: a dormant company, an old or near-time-barred debt, poor documentation or advanced insolvency.
How to check solvency yourself
Before pricing your expectation, it is worth a basic check of the debtor company using public sources. You can review whether it files accounts and registers acts in the companies register, whether it appears in the official gazette (appointments, removals, dissolution) and whether it is still active. A company that files accounts, keeps trading and carries no worrying entries supports a higher price. Signs like unfiled accounts, chained changes of address or directors resigning are red flags the buyer will see too.
Debts with a guarantee or personal surety
If the debt has a personal surety from the director, a guarantee or a pledge, its value rises markedly: the buyer has a second route to collect if the company fails. Gather and mention those securities from the outset, because they change the risk profile entirely. A modest business debt backed by a solvent surety can be worth more than a larger one with no security at all.
The time factor in business debt
In business debt, time weighs double. On one hand, the limitation period runs, after which the claim can no longer be enforced. On the other, the debtor company's situation can change fast: a company solvent today may hit trouble or insolvency tomorrow, and with it your claim's value falls. Selling while the company is still healthy usually preserves far more value than waiting to see whether things improve.
If the company changes hands or is dissolved
The debtor company being sold, merged or dissolved does not erase the debt, but it does complicate collection and therefore lowers the price. In an orderly dissolution there is a liquidation process in which your claim takes its place; in a de facto disappearance, collecting becomes much harder. If you spot corporate moves at the debtor, it is a signal not to delay the decision to sell.
List it and receive offers from real investors.
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