If you need fast money and have no time to apply for a loan, your best bet is to sell debt notes. You can cash in on your debt instruments in as little as one week, unlike bank loans which can take two weeks or more. Given the fast-changing money market, there is good reason you would want your cash now instead of waiting out the debt.
There are several ways to help your debt instruments sell, but what is more important is finding a professional note buyer. A good note buyer should be able to give you top dollar for your note. There are hundreds of note buyers out there, but it pays to take your time in choosing one.
The first thing you should look for is experience. A buyer who has been in the trade for many years knows his way around the business. They will know how the market works, how to get the most competitive rates, and how to make your debt instruments sell for as much as possible.
Rapport is also essential. You wouldn't sell debt notes to a buyer you're not comfortable with. Your note buyer should be open to your questions and answer them in a way you can understand. Remember to put everything you discussed in writing, including all the associated costs.
Of course, you can't expect to get full value for your debt note in cash. The note buyer will take into account the balance and time left on the note, the payor's stability, interest rates, and other factors that contribute to the risk it holds. Whoever buys your note will assume the risk of the debt losing its value to inflation or rising interest rates. Obviously, debt instruments sell for more when they pose less risk to your buyer.
If you're new to note selling, it's easy to fall for the unreasonable fees that some buyers charge. Be wary of additional costs such as points, consultation fees, and closing costs. You don't have to spend a small fortune just to sell debt notes. Many professional buyers have online consultation services, where you simply submit your details and get a free quote within two days or less.
It is possible to sell debt notes partially, if you need a lump sum but want to have some left over for the future. You can also take split monthly payments, so that you're taking part of the note and selling the rest. There are many other ways to structure the deal, so make sure you go over all your options with your buyer.
There's a world of other uses for your money, so why lock it in paper? It doesn't take much to sell debt notes - all you need is to find a good note buyer. A little planning won't hurt, either. Remember, your money is more valuable today than it will be tomorrow.
Jamie has been working in the finance industry for many years and is a contributing editor to Find out how debt instruments sell on our site.
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