Is There a Best Collection Agency for Me?

Many starting lending companies debate over the best collection agency they can hireto ensure that business would go smoothly. What they do not know is that there isn’t really a best one. What may seem like the best collection agency for one company may turn out to be the worst one for another. It is all about making things work.

In order to find out which is the best collection agency for a lending company, it is necessary to find out what options they have. Basically, a lending company has three options – a first-party agency, a third-party agency or a debt buyer. The last one could be taken as a last resort rather than as an option.

First and third-party agencies can be used for debt collection for both good and delinquent accounts. A first-party could be the best collection agency for you if you have a relatively small business. First-party agencies are usually part of the lending company – more like a branch or department. As a small business, the first-party can also be in charge of other financial matters, that is why small lending businesses prefer them, since they have to manage a small amount of borrowing accounts.

A third-party agency might be the best collection agency if you have big lending business. They are also great to get for when you have delinquent accounts since third-party agencies usually specialize in delinquent account collection. Third-party agencies are great because you can create a partnership system with them. They collect on your behalf and

you can pay them a fixed rate or a percentage of what the borrower owes from you. You have to be very selective with a third-party agency because it is likely that you would work with them for a long time. Since they will be representing you to the account holders, they should be professional and trustworthy. A background check on the agency is necessary.

The debt buyer is never the best collection agency for any lending business. They are taken as a last resort when a delinquent account has not paid for a seriously long time. They buy the account from you for a percentage value and pursue the borrower for a full payment, sometimes with more interest. Since they are not bound by a partnership with you, they can use any methods to pursue the balance. Carefully think about the collection agency before deciding who to go for.

About the Author

The author, Dale Nelson, has been in the business for a very long time. He has experience with debt collection, as well as in selecting the best collection agency for companies.

SummaryThe best collection agency will differ for each lending business. Learn the types and select only what you think would work best for you.