M&A Seller Financing: Third-Party Loan Servicing

Jacob Orosz Portrait
by Jacob Orosz (President of Morgan & Westfield)

Executive Summary

What is a third-party loan processor?

If you have decided to finance the sale of your business, you should know that an experienced third-party loan processor can handle all aspects of collecting, crediting, and disbursing third party payments — they simplify the day-to-day management and process of collecting on your loan from the buyer.

Why should I use a third party to administer the payments?

Using a third party to administer the payments simplifies record-keeping. It also removes the obligation from you for handling late payments while focusing on more important matters. This allows you to maintain a good working relationship with the buyer by having an independent third party serve as a buffer if payments ever arrive late.

If you’re curious about what, exactly, it that third-party loan processors can do and who, exactly, are some of the companies that do it, we’ve got the scoop…

Services Offered by Third-Party Loan Processors

The services provided by these companies may include:

  • Monthly payment accounting, processing, monitoring, collections, receipts, and notifications
  • Setup, secure storage and maintenance of records, and annual payment history reports
  • Reserve accounting, amortization schedules, account history ledgers, and payoff quotes
  • Automatic (ACH) payment directly from buyer’s to seller’s checking account
  • Handling and processing late payments and late notices
  • Calculating interest, late charges, and due dates to minimize potential disputes
  • Mailing 1098 and 1099 interest statements to all parties and the IRS
  • Providing referrals for selling your contract


You may consider trying the following companies:

  • Automatic Funds Transfer Services | http://www.afts.com/ | 206-254-0975
  • Payment Servicing Corporation | https://paymentservicingcorporation.com/ | (406)-257-8186
  • Accruit | https://www.accruit.com/ | (866) 397-1031
  • Escrow Services, Inc. | http://www.escroserv.com/ | (800) 654-7870
  • MidWest | http://www.midwestassetacceptance.com | (585) 377-2810
  • Gregory Funding | http://www.gregoryfunding.com | (888) 324-3578