Monterey Leads the Way with Consumer Finance

customer-credit-290With Consumer Financing and Debt Recovery hot topics on every business owners mind right now, FactoringInvestor (FI) caught up with Scott Little (SL) from Monterey Financial to fill us in on how they are helping businesses through these tough economic conditions.

FI: So, tell me what Monterey has been doing lately?

SL: We have been inundated with calls lately due to GE, MBNA and other large public finance companies either discontinuing their funding of consumer finance transactions or minimizing their participation in some regard. Many of these companies used their consumer finance divisions as loss leaders for their more profitable products, such as home equity loans, but with the housing market in shambles, there is very little of that going on right now. Their client’s are searching for funding and we seem to be there best fit.

FI: Given the current economy, have you had to change the way you do businesses?

SL: This is a great question. We have not had to change the way we do business so much internally, but we have had to take a proactive approach to what will certainly be an increase in delinquencies in the months to come. For our finance company, we have raised our reserves by 2.5% and we have raised our minimum credit score to 650. Together, these two adjustments should cover any spikes that we will see in delinquency in the near future.

With regards to our delinquent collection company, we continue to work exclusively on a contingency basis and we expect to see an increase in business placed as the economy continues to slide. Unfortunately, the collectability of those accounts will suffer as well for some time.

FI: A lot of cash flow companies are struggling in this current environment, what makes Monterey different?

SL: I think the fact that we have three different divisions that we rely on; consumer finance, loan servicing and delinquent collections, is a huge benefit for us. If one of the divisions is off a bit from month to month, we are not dependent on that division in order to make money as a company.

Being a privately held company helps as well. We can pretty well do as we please and make changes a lot quicker than most public companies can. If we see red flags, we stop, gather information and then strategize and implement new plans immediately. We are very fortunate to have had our best year in terms of net income, in 2008.

FI: Monterey is involved in several different areas. What is your core business that you seem to always go with?

SL: We have continued to rely heavily on the timeshare/vacation club industry. Since 1990 we have been the industry leader in delinquent collections, one of the top three in servicing and quickly becoming one of the biggest finance companies in the industry as well. It’s an industry that we know very well. What makes things nice is that our approach to all of our services is pretty much the same, regardless of industry. While timeshare is a big piece of what we do, the majority of what we do in our finance company is in a number of different industries, many of which are referred to us by financial consultants.

FI: Tell me about the ‘debt recovery” part of Monterey.

SL: As I mentioned before, we only work on a contingency basis, we do not purchase delinquent accounts. In today’s economy there is a real push to sell bad debt and just take a few pennies on the dollar, but we don’t believe that is the best approach. Our contingency plan, where we keep 30% of the funds that we collect, allows our client’s to get 70% on the collectible accounts, then they can sell the real dead stuff for pennies on the dollar.

Our approach is very unique, relying heavily on phone contact and using letters just as a collection tool. We know that most people who are behind on their debt to our client’s, are most likely behind on other bills as well, so we need to prioritize our debt ahead of the others. Sending out letters simply will not accomplish that. We get the debtor on the phone and get arrangements for payment in full as best as we can. What I can tell you is that regardless of industry, we will out collect any other agency. This is not a sweat shop. We are talking about professional, college graduates, who are earning a very good living as a bill collector.

FI: Where can people get a hold of you? Where can they get more information?

SL: Our sales department can be reached over the phone at 800.456.2225, or by visiting our website at and clicking on any of our services, or ‘Brokers,” for consultants. I can be reached via email at

FI Summary:

Consumer receivable financing is one of many cash flow categories where consultants can earn commissions by referring transactions to funding sources.

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