| Basic
Approach to Business Debt |
Reduce
total amount(s) owed by up to 70%. Result:
typically helps company restore its cash flow, avoid
bankruptcy, and have a stronger balance sheet.
|
Simplify
Client’s debt situation to one monthly
payment--which is often higher than Client's
existing minimum monthly payments due to the longer
repayment term of the consolidation loan. Result:
Client often pays 50-100% more than the total
of its original debts. |
| Upfront
or Setup Fees? |
One-time
$500 deposit, which is refunded to Client at
end of PSI’s final account settlement with Client.
No upfront fees. |
Client’s
first 2 or 3 monthly payments typically are kept in
full (i.e., are NOT applied to debts) by the
Consolidator or Debt Management firm. Other monthly
fees also may apply. |
| "No
Fee If No Debt Savings" Guarantee? |
Yes--fee
paid by Client is based solely on the $
amount of debt savings achieved. |
No--consolidator’s
fee is not dependent on $ amount of debt savings
achieved. Fixed fees almost always apply.
|
| Is
Fee Based on the $ Amount of Debt Owed? Or on
# of Creditor Accounts? |
No:
As PSI’s fees do not depend on either of these
variables, more-heavily indebted Clients are not, in
effect, penalized for it. |
In
many cases, yes, fees are charged based on either
the $ amount of debt owed or the # of creditor
accounts. |
Are
Monthly Payments
or Escrow Deposits Required? |
No
monthly payments: However, PSI opens an escrow
account for Client at a major, local bank and many
Clients find it helps to keep a balance in the
account equal to 20% of unsettled debts. Escrow
account is in Client’s name, is
interest-bearing, and all funds in it are returned
to Client when the relationship with PSI ends.
PSI never touches Client’s $ without written
authorization. |
Client
must send in monthly, non-refundable payments to
consolidator, who keeps a % of every payment before
paying creditors. |
| How
Long Process Takes; How Likely Client is to Complete
It |
PSI
works at “Client’s pace”: if Client is able to
pay reduced-$-amount debts to multiple creditors,
PSI process may take only 2-3 months. If not,
process can take longer. |
Most
debt-consolidation progms have 3-to-5-year terms.
Related fact: about 75% of those starting consumer
debt-consolidation programs don’t complete them. |
| Effect
on Business Credit Rating |
Client’s
business credit rating (e.g., Dun & Bradstreet)
has already dropped due to late or missed payments.
By reviving cash flow, PSI helps to clean up balance
sheet, which lifts company's credit rating and
strengthens its finances.
|
Client’s
credit rating (e.g., Dun & Bradstreet) could be
lowered and stay lowered due to the consolidator's
long-term process. |
| Do
Interest and Late Fees Continue Accruing on Unpaid
Debt During Settlement Process? |
Yes,
but the Client's debt savings are FAR more than any
accumulated interest or fees. |
Consolidation
loans usually stop late-payment charges, but they
also have their own interest rates and longer
repayment terms. Client typically repays 50 to
100% more than the total debt owed. |
