Work out recovery rate on defaults instantly with clear inputs, formula shown and shareable results.
Gross recovery ignores the cost of chasing the money. Netting legal and collection expense, and noting how long recovery took, gives the figure that should feed loss given default estimates.
Recovery rate
Net rate = (recovered - collection cost) / defaulted amount
Figures are estimates based on the inputs given. Bank charges, regulatory minima and market rates change and differ between institutions and jurisdictions. This is not financial advice — confirm with your bank or treasury policy.
On unsecured recoveries it can consume a fifth of what is collected, turning a respectable gross rate into a poor net one.
Sale prices are lower but immediate and certain, which can beat a slow, costly in-house recovery.