How do I sell my collection agency?

Buyers of collection agencies look at a few things closely: who sends you work, how much you recover, how you pass it on and who does the calling. If those answers are easy to give and easy to check, the sale goes more smoothly. If they live in your head or in scattered files, expect more questions and more delay. Start preparing well before you tell anyone you are selling.

Gather the records buyers ask for

Pull together your client contracts, placement and recovery history by client, remittance records and bank reconciliations for client money. Add your collector agreements, your policies and complaint files. Ask your accountant to review them before a buyer does. Clean, consistent records show that the agency is well run, and they let you answer questions quickly.

Decide what happens to open accounts and client money

Accounts in progress and money you hold for clients need a clear plan at closing. Who finishes the open work, who reports to the client and what happens to funds already collected are all points for your lawyer. Raise them early and put the answers in writing, because a surprise here can stall a deal at the last minute.

Tell clients and keep your collectors

Clients and collectors will hear about the sale at some point, so decide who is told, when and by whom. Many owners tell the largest clients personally once the buyer is committed. Talk to key collectors about their roles and, if you can, about staying through the handover. Your confidentiality agreement should cover what buyers may say to them.