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12-21-2019, 11:50 PM #1
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Default Rates by Paper
Any ideas on default/collection rates for A, B C and D paper?
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12-23-2019, 11:36 AM #2
A- Least
B- Less
C- More
D- Most
LOL, for real though - hard to just gauge as a generalization based solely off paper grades A - D.Anthony Diamond
Underwriter
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12-23-2019, 11:57 AM #3
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12-23-2019, 03:37 PM #4
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Thank you captain obvious!
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12-23-2019, 05:31 PM #5
Hard to just say otherwise solely based on generalizations, ya know?
Someone would have to tell you based off of a specific book's performance - and it would vary from funder to funder. It'll depend on funding volumes & frequencies in each category, etc.
Example -Some books' "A" defaults may have a much higher default rate than "D", because if said funder is doing $500k - $1mm "A" deal fundings, and only doing $10k - $100k "D" fundings, the default RTR on "A" may be much higher in a situation like this where just one bad $1mm "A" deal makes up the RTR of like 10-20+ "D" deals.
Make sense?
So really, no one can just say - unless they're talking about a specific book.
Otherwise, THIS APPLIES:
A- Least
B- Less
C- More
D- Most
LOL!Anthony Diamond
Underwriter
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12-23-2019, 06:26 PM #6
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12-23-2019, 09:12 PM #7
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- Oct 2013
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- Designer
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- 591
Approximate default rates:
Retail Bank - 2.5%
SBA loan - 4.7%
A Paper - 5 - 8%
B - 8 -12%
C - 12 - 20%
D - 22 - 28%
If a funder has a good collections practice, you can still get 20-40% of that money back
Industry average is about 9-13%
These are loose guidelines of course, different factors can come in to play.
Www.UccRadar.com - Merchants seeking Funding, not just Uccs
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