How do I find a collection agency for sale?

Owners of collection agencies may worry about what clients, collectors and the people they contact will think if word gets out. That means few are advertised, and the ones that are may sit under an unexpected heading. The search is partly a matter of using the right words, and partly a matter of telling the right people that you are looking.

Try the names the trade uses

Listing sites may file an agency under collection agency, debt recovery, receivables management, accounts recovery, credit and collections, or business services. Try each with and without your region. Set up saved searches so new listings reach you. Read each one carefully, because a listing described as a collections business may be a service for creditors, a portfolio owner or something else entirely.

Ask the people who already know

Brokers who handle service businesses may know of a quiet sale, so ask whom the broker acts for and what the seller wants in a buyer. Accountants and lawyers who serve agencies often hear when an owner is thinking about retiring. A short, respectful letter to an owner can start a conversation.

Know what to ask for first

Before you spend money on advisers, ask for an outline of the client base, the type of work placed, the number of collectors and how long the owner expects to stay. Expect to sign a confidentiality agreement before you see anything specific. Be ready to show who you are and how you would fund a purchase, so the seller takes you seriously.

• A written buyer profile and a list of the services you would keep.
• Proof of funds or a lender’s early interest.
• A lawyer who knows how agencies are regulated.
• An accountant who can read client trust records.