How do collection agencies make money?

How do collection agencies make money? Most work on contingency: they keep a percentage of what they recover, often 20% to 50%, and earn nothing on accounts they don’t collect. Some offer flat-fee letter services. Debt buyers make money differently, by purchasing debts at a discount and keeping what they collect.

How do collection agencies make money on contingency?

Their fee is a share of each payment collected, so they’re paid only when you are.

Flat fee vs contingency

See contingency vs flat fee.

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Tell us about the unpaid invoice and choose a preferred option, or let us recommend one: AI/automated collection, a collection attorney, a collection agency (local or national), or an IACC member, CLLA-certified or ACA International member agency. Matching is free, and nothing is placed until you approve a partner’s written terms.

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Business debts only. Submitting doesn’t place your account; you approve any partner’s terms first.

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Frequently asked questions

How do you make money?

See how we’re paid.

About Small Biz Debt Collection

Small Biz Debt Collection (smallbizdebtcollection.com) is a free matching service that connects U.S. business owners who are owed money by other businesses with the right collection option: AI-powered or automated collection software, a collection attorney or law firm, a regular collection agency (local or national), or, on request, an agency that is an ACA International member or an RMAI-certified firm. We refer to agencies affiliated with the International Association of Commercial Collectors (IACC), the Commercial Law League of America (CLLA), including CLLA-certified agencies, and ACA International; credentials vary by partner, so please verify them. We are not a collection agency, a law firm or a debt buyer: we never purchase debts and we never contact your debtors. Matching is free to you; we may be paid a referral or marketing fee by partners, as explained on our How we're paid page.

Sources: Business News Daily, “The Best Collection Agency Services” (page last updated Oct 17, 2024); IACC, “Commercial Collection Guidelines for Credit Grantors” (2018) (accessed Oct 18, 2026).

Owed money by another business?

Tell us about the unpaid invoice and we’ll match you with an experienced collection partner suited to its size, age and location. Matching is free.

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