Forward Flow Agreements
How recurring debt portfolio sale arrangements work.
Forward flow agreements create recurring sales of newly charged-off accounts on pre-agreed terms.
When forward flow helps
- Predictable monthly/quarterly charge-off volume
- Desire for operational consistency vs episodic auctions
- Buyer appetite for ongoing paper with known characteristics
Key terms to negotiate
- Eligibility criteria and exclusions
- Pricing formula or grid
- Volume bands and true-ups
- Documentation standards
- Term length, termination, and audit rights