When dealing with delinquent accounts, your best option might be to sell off the bad debt. This approach allows you to recover some cash from accounts that are unlikely to be collected through traditional means. Selling off bad debt to a third party (often called a debt buyer) typically provides immediate funds, albeit at a discount.
The other options have their own implications:
- Invest in a collection agency: This can be effective, but it may involve additional costs and there’s no guarantee of recovery.
- Sell more shares of the company: This could provide capital, but it may dilute current shareholders' stakes and is not a direct solution to the problem of delinquent accounts.
- Take a business loan: While this might provide cash flow, it adds debt and may not address the underlying issue of collecting on delinquent accounts.
Overall, selling off the bad debt can be the most straightforward and effective approach to handle delinquent accounts quickly.