New Research Shows Most Debt Collection Companies are Small Businesses Helping Other Small Businesses Thrive

8/18/2016 1:00 AM

Most debt collection companies qualify as small businesses based on employee size and total annual receipts, and many of them primarily conduct business with other small-business clients.

August 18, 2016 – Washington, DC – The overwhelming majority of debt collection companies in the U.S. are small businesses serving other small-business clients, according to new research by ACA International, the association of credit and collection professionals.

The research, outlined in a new white paper “Small Businesses in the Collection Industry: An Overview of Organization Size and Employment,” shows that a vast majority of debt collection companies in the U.S. are small businesses that provide critical services to other small businesses.

According to the study, 48 percent of ACA member organizations (1,164 companies) have fewer than nine employees. Eighty-six percent of ACA members (2,080 companies) have 49 or fewer employees and 93 percent of members (2,257 companies) have 99 or fewer employees. Less than one percent of membership in ACA International, the largest membership organization in the credit and collection industry, has more than 500 employees. 

The Small Business Administration Office of Advocacy defines a small business as either “an independent business having fewer than 500 employees,” or one that generates annual receipts that do not exceed the SBA size standard; for debt collection companies, the size standard is $15 million. The research shows that 78 percent of ACA member companies have less than $15 million in average annual receipts.

The research also shows that affordable, professional debt collection services are a critical service for other small businesses. Almost half of ACA members (44 percent) indicated that between 51 percent and 100 percent of their customers are also small business clients.

“This data is essential in helping us understand the role that debt collection plays in the economy, especially when it comes to helping small businesses stay viable,” said ACA International CEO Patrick J. Morris. “Debt collectors are most often small businesses helping small businesses collect rightfully owed debts in a timely and consumer-friendly fashion.”

ACA's latest white paper is part of an ongoing research initiative to collect more original data about the credit and collection industry, and quantify how debt collectors help consumers and the overall economy.

ACA International (ACA), the association of credit and collection professionals, is the largest membership organization in the credit and collection industry. Founded in 1939, ACA brings together third-party collection agencies, law firms, asset buying companies, creditors and vendor affiliates, representing tens of thousands of industry professionals. ACA produces a wide variety of products, services and publications, including educational and compliance-related information; and articulates the value of the credit and collection industry to businesses, policymakers and consumers.



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