Barrier To Entry Are Forming in the Debt Collection Industry, Adding Value to Incumbents

We have some great news for the owners of debt collection agencies. For the first time in history, a defensible barrier to entry now exists that prevents outsiders from simply starting up a collection agency. This means that incumbent agencies have increased in value. 

I recently discussed this phenomenon in my Fair Debt podcast with Lex Patterson:

It wasn’t long ago that a telephone, a mouth, and a debt were all the tools needed to start a collection agency. That is no longer the case with these barrier to entry. The increased cost of operating a collection agency, coupled with the credit grantor’s requirements to operate as a business for three years before they place accounts, has created a distinct separation between the “haves” and the “have nots” in debt collections. This is great news for existing debt collection companies as the price that outsiders pay to acquire performing collection businesses has increased. Of course, this is only one factor that is considered when buyers establish pricing.

Let’s discuss how this applies to your business. Please let us know if you want to schedule a no-cost, no obligation call to discuss pricing your business in today’s dynamic market by contacting us here.

Leave a Reply