For a business owner, the invoices handle could be very hectic, especially when your company's invoice is unpaid. According to the records and facts discovered by independent consulting firm Plum, over 11% of total invoices allocated by small or average-sized enterprises are paid late, which comes to a round of $1 trillion per year. By the records, the average small business in the US has over $84,000 unpaid invoices. The payment for an invoice usually takes 21-30 days and as many small businesses who have a limited cash budget of 27 days only, can be pushed by the felon customers at red alert.
Therefore, the Debt Collection Agencies are meant to accumulate the unpaid accounts through their training and resources, after the disruption of many businesses. These agencies are very promising and have a success rate of 20%.
Managing and devoting time towards the delinquent accounts could be a pretty waste of time and also, could cost a huge expense. Debt collection agencies are hired for these purposes and to handle your company's invoices thoroughly. It saves you valuable time as well as collects incredible debts.
However, finding the right debt collection agency for your business could be very confusing and hectic. That's why we present to you the top 10 debt collection agencies, that would help you pick wisely and smartly.
What is a Debt Recovery Startup?
What are the Basic Needs to Start Debt Recovery Startups?
How do Debt Recovery Startups Work?
The Pandemic- A Way to the Popularity of Debt Recovery Startups?
Fintech 2021- A Revolution for Debt Recovery Startups
Top 25 Debt Collection Agencies
- Atradius Collection
- Summit Account Resolution
- PRA Group
- The Kaplan Group
- MNS Credit Management Group
- Rocket Receivables
- Rozlin Financial Group
- Encore Capital Group
- ACA International
- Consumers Financial Protection Bureau
- National Consumer Law Center
- ARRMS (India) Private Limited
- Direct Recovery Associates Inc.
- The EOS Group
- Maxim Credit Management Services
- Cedar Financial
- Debt Collection India
- Debt Nirvana
- Unified Credit Solutions Pvt. Ltd.
- Afford Motors India Pvt. Ltd.
- CreditNirvana
- Recoupex
- Pair Finance
- CollectionHub
- Captira
What is a Debt Recovery Startup?
The debt recovery agency or startups chases the businesses to pay back what they owe. In simple words, they try to retrieve the unpaid money from the debtors.
When we talk about businesses and industries, debt payments can be quite complex. A creditor can't go to every debtor and collect the debt from them. So, the businesses resort to the method of debt recovery. In this method, they hire a third party to recover debt on their behalf.
With the rise in debts, there is also a rise in the need for debt recovery. Thus, more and more debt recovery startups are entering the marketplace.
What are the Basic Needs to Start Debt a Recovery Startup?
The first step to start anything is to plan. Every successful startup not only begins with an idea but also good planning and execution of it.
The startup then acquires the basics that they need to enter the market. These include computers with working internet.
Since it is a debt recovery startup, it does pay more attention to the legal aspect. They then work on getting the license and insurance plans.
The most important thing a debt recovery startup needs is a good team. A team that knows their work and has good communication and management skills. So, this startup needs the best masterminds in the team.
How do Debt Recovery Startups Work?
The debt recovery startups work on commissions. These startups connect with businesses and collect debts on their behalf. They fix a certain percentage as commission for the amount that they collect.
The percentage of commissions depends upon how difficult a debt recovery is. They charge a smaller amount for the new and easy debts. In this way, the amount increases for the complex recovery cases.
The debt recovery companies used to hire agents to do the work. Now, the time has changed. The new-age startups used modern automatic technologies for recovery. They don’t hire special agents, rather resort to the use of the software.
Such software helps businesses to recover from debt in an automated mode. It sends reminder messages to the customers or clients about their debts.
The startups now design their software in a way that it can work on an auto-pilot mode. They offer negotiation deals, counteroffers, dispute management. They even make customized monthly plans according to customer needs.
These startups provide a solution to every debt recovery issue. From collecting debt in a simple way to dealing with the legal aspects of recovery.
There is no specific market for a debt recovery startup. Every business that extends its products and services on credit is the market itself. These businesses often find it complex to collect their debts. So, they contact these startups to deal with their debts.
The Pandemic- A Way to the Popularity of Debt Recovery Startups?
In the past few months of the ongoing pandemic, the economy has begun to see some changes. The financial debt is decreasing in the market. But Public debt continues to increase. So, the debt to GDP ratio remains high.
The pandemic made the household and corporate sectors flooded into debt. Both the sectors owe huge mortgages, loans, instalments, and more.
The household debt has increased by about 5 trillion dollars, reaching 53.3 trillion dollars in the last year. The corporate debt, even so, has risen about 11 trillion dollars, reaching 152.1 trillion dollars.s
Now, the demand for proper debt handling went up. When the market demands something, it is important to supply whatever it needs.
Debt recovery companies have always been there whether it was a boom or recession. But, the pandemic paved way for debt recovery startups. These startups are now in more demand as they come up with modern and better techniques.
Technology Over the Traditional Practices of Debt Recovery
The pandemic increased the debt in the market. With this debt, there came two types of debtors. The ones who could not pay back their debts. On another note, others only pretended that they could not payback.
Here, the tech-based debt recovery startups solved the issue. They do not hire physical agents to go and investigate every debtor. They make use of technology and build software to differentiate them.
The traditional debt recovery method cannot be a hundred percent reliable. It is quite common for a human to commit a mistake. Technology yet makes the process easier and more reliable.
Fintech 2021- A Revolution for Debt Recovery Startups
Fintech (Financial Technology), as the name suggests combines finance with technology. It aims to replace the traditional methods of financing with modern technology.
Fintech startups are now changing the game of debt collection. They have changed the process of communication.
Now, these startups use artificial intelligence and machine learning. This enables them to keep track of customers engagement without having to call them now and then.
Top 25 Debt Collection Agencies
Atradius Collection
Atradius Collection, the agency was built in 1925, and is well known for its benchmark "managing risk, enabling trade". The agency is based in the United Kingdom as the leading commercial debt collection agency. Atradius Collection is a part of numerous other debt collection trade associations around the world. Such associations include the Federation of European Credit Management Associations, the International Association of Commercial Collectors, and the credit services associations.
The best functioning points of Atradius Collection is,
- Free instant online quote
- No minimum amount of debt
- Engaging with international companies
Atradius Collection has a global success rate of over 79.3%. It has a big customer base of more than 15,000 and manages over 90,000 debt commercial cases every year.
Summit Account Resolution
The well-established debt collection agency, Summit Account Resolution founded in 1996 works by recovering your debt without any further estrangement with the customers or vendors. Summit Account Resolution has accreditation with the Better Business Bureau (BBB) and comes out with outstanding results. It provides tons of offers such as transparent pricing, customised approaches, and business-to-business along with business-to-consumer collections services.
Summit Account Resolution provides great facilities and a custom approach for the accounts it handles. It prioritises its clients with satisfaction and good bonds by the company.
PRA Group
The prominent company, PRA Group Inc. (PRA) was established in March 1996. It focuses on accumulating and acquiring non-performing loans from Virginia, Norfolk (United States). PRA Group Inc. is counted among the largest debt buyers in the United States by the report of the Federal Trade Commission.
The founders; Kevin P Stevenson and Steven D Fredrickson, founded PRA Group Inc with absolute devotion and innovative plans. As per the reports of FTC, PRA Group Inc is also counted among the top debt buyers.
Anik Banerjee
The Kaplan Group
The top-notch commercial debt collection agency, The Kaplan Group, founded in 1991, manages the working of only Business-to-business collection. The Kaplan Group is one of the most considerable choices in the debt collection agency is because:
- The success rate of 85%
- Affordable fees on big debt balances
- Free upfront and membership
The Kaplan Group handles tons of claims of various sizes from $20,000 to $1 million. Moreover, it offers tons of services such as Background investigation, in-house law firm, skips tracing, settlement agreement, credit analysis, and many more.
MNS Credit Management Group
Founded in 1996, MNS Credit Management Group offers boutique services in Business Credit Information and Debt Collection at a global level and is hailed as one of the largest Indian debt recovery management companies. Headquartered in New Delhi, MNS Credit Management Group also has its branch offices in some of the major cities of India including Mumbai, Chennai, Kolkata, Bangalore, Hyderabad, Ahmedabad, Ludhiana, and Tirupur, along with some offices overseas too.
MNS Credit Management Group is a longstanding member of the world’s largest and most extensive global network of Debt Collection specialists. The company works with an experienced group of Attorneys, Chartered Accountants, Management Graduates, and Finance Professionals, and has successfully helped creditors in managing their overdue invoices, credit, and receivables.
MNS Credit Management Group works on a strictly contingency fee model (No Collection - No Fee) for amicable settlement. The contingency fee charged by the company is exclusive of any taxes/GST. All of these makes MNS Credit Management one of the best choices for commercial debt recovery solution.
Rocket Receivables
The debt collection agency owned by TSI, Rocket Receivables, is majorly designed for small business owners. It provides tons of offers to them like healthcare, residential, retail industries, trade, and education. Its membership comes absolutely free of cost and it charges for only the activities of actual collection.
Rocket Receivables safeguards on the fixed-fee collections even as low as $15 per account. It has no online portal access and comes with great results.
Rozlin Financial Group
Rozlin Financial Group (RFGI), founded in 2008 is a debt collection agency that provides the service of comprehensive consumer debt collection along with a customised strategy. The company always keeps itself updated on several new and promising collection techniques, regulations or laws through different training programs.
With the help of its numerous offers and services for the customised approach, it improvises itself in the recovery of the accounts. It offers comprehensive reporting and skip-tracing together with its advanced trained staff.
Encore Capital Group
Encore Capital Group is counted as the largest publicly traded debt buyer in the United States based on revenue, i.e. 140 crores USD. Encore Capital Group was established in 1953 with now, investments and undertakings in 15 countries around the globe. Encore Capital Group has its headquarters in San Diego and California (United States).
Encore Capital Group, a consumer banking company that is known as the leading debt management company for several consumers and business owners in a wide range of assets.
ACA International
The industry trade group, the Association of Credit and Collection Professionals ACA International, founded in 1939 in the United States works for the handling and management of debt collection agencies including debt buyers, creditors, debt collection industry service providers, and collection attorneys.
ACA International has its well-established headquarters in Minneapolis and Minnesota (United States).
Souvik Dey
Consumers Financial Protection Bureau
The government agency, Consumers Financial Protection Bureau is the United States-based debt collection agency that looks after the protection of consumers in the financial system. It was founded in 2011 by the US government. It has always been updated with the latest technology tools to keep an eye on the financial entities that are used in social media and algorithms to meet consumers' goals.
Consumers Financial Protection Bureau provides tons of facilities that include credit unions, payday lenders, banks, security firms, debt collectors, foreclosure relief services, and many other financial companies systems.
National Consumer Law Center
The non-profit organisation, National consumer law center was founded by Robert Drinan in 1969. It has well-organized headquarters in Massachusetts and Boston, United States. National consumer law center offers for low-income people on their consumer's issues. Several private advisers, legal services, government and also, community organizations work together with the consumer reform.
The national consumer law center is an America-based company that works for dozens of people who do not have financial stability in their lives.
ARRMS (India) Private Limited
ARRMS (India) Private Limited is one of the top debt collection agencies in India. It helps to provide complete debt recovery solutions that come with proactive legal actions. ARRMS aims at the strategically framed legal intervention that adheres to all regulatory, judicial, and statutory guidelines.
As the methods of debt collections, ARRMS includes a few of the traditional collection methods, for instance, tele-calling, field visits along with legal interventions. The legal interventions can consist of arbitration, enforcement of section 17 orders through court, execution of awards or decrees, mediation, bankruptcy proceedings, criminal proceedings, civil suits, and so on.
Alan Joseph
Direct Recovery Associates Inc.
Direct Recovery Associates Inc has specialisation in collecting professional and commercial service that is being claimed throughout the U.S. as well as in India.
They promise to prove three things - Persuasiveness, persistence, and professionalism. All these skills infused in their collectors make them stand apart from the crowd. Their skills and performances are the escape to their high success rate by bringing in a relevant level of satisfaction for the clients.
The EOS Group
Another top debt collection agency is the EOS Group. It is currently working with 50 companies that operate in more than 25 countries globally. It has been positioned among the leading international collection service providers.
The high rated success of The EOS Group is entirely based on its fusion of expertise in national markets and also in its wider field, international focus. The headquarter of EOS Group is based in Hamburg.
Maxim Credit Management Services
Maxim Credit Management Services is a leading organization that has specialized in domestic and international debt collection as well as debt recovery services. Operating across the Asian countries, this company provides an entire solution in recovering long and overdue debts.
With skilled debt collectors and attorneys, it promises to produce a faster payment from the debtors of the clients. It offers a wide variety of credit and risk management services. The services include Receivable Management and legal and Para-legal Services, Debt Collections and Debt Recovery of all kinds, and Skip Tracing Services.
Cedar Financial
Cedar Financial is also among the top debt collection agencies. It focuses on providing the clients, the most professional and comprehensive debt recovery services that are available. The fields of their operation include Commercial, Education, Government, Healthcare, and Retail.
Keeping in mind the commitment and relationship between the parties, they promise a positive payment experience. With current technologies and personnel education programs, they also provide higher conversion rates.
Debt Collection India
Debt Collection India claims to be the most competent and competitive organisations from the top collection agencies. They offer a hassle-free mode of performance and commitment from the start to the end.
They have prepared their collectors with rigorous and comprehensive training. This is why they are equipped with the skills required to handle any type of cases in need of a solution. They have been operating for a decade and aims at their enhanced growth with even more promising deeds.
Debt Nirvana
Debt Nirvana has also positioned itself among the leading debt collection agencies in India. The company is represented by a group of people who are working with passion and dedication. They have successfully delivered excellent results to their clients and are equipped with combined experience.
The company has been operating for 2 decades now and partnered with a few MNCs. They are Google, Honeywell, Bharti Airtel, and LG Electronics. It also ensures that the returns of the clients on the investment are higher in rate.
Unified Credit Solutions Pvt. Ltd.
Unified Credit Solutions Pvt. Ltd. is the leading B2B Credit Management Group that was established in 1991, sharing its specialisation in fields like Business Information Services, Receivables Management, Para Legal Services, and Debt Collection.
A team of tried and tested professionals, as well as local partners, this company aims at providing prompt, efficient, and reliable service, currently operates in all huge global cities from over 214 countries. It has worked with companies from the fields such as Credit Insurers, Transnational Banks, Accounting & Legal Firms Factoring Companies, and a broad range of Multinational companies too.
It is important to make strategic and diplomatic movements when it comes to monetary transactions.
Afford Motors India Pvt. Ltd.
Founded in 1996 by Mehar Yadav, Afford Motors India Pvt. Ltd. is another among the top debt collection agencies. The company initially started with only two employees and an ambition. Standing today it has employed hundreds of employees working in three collection centres. Also, they have two training facilities based in Mumbai and Jabalpur.
This organization provides a wide comprehensive custom collection along with receivables management solutions. It aims at complementing and adding values to its existing methods of collection. They have partnered with a few organizations related to financial retail, services, automobile, debt buying, utility, and related markets.
CreditNirvana
Founded in 2018, CreditNirvana helps businesses with debt recovery with the help of artificial intelligence and digital technology. It is New Jersey based startup that helps in making correct strategic collection decisions. It has worked with big companies like Toyota, HDFC, etc.
Recoupex
Recoupex is a debt recovery startup focussed toward industries like- Transportation, Logistics and Storage. It was founded in 2019 in Hamburg. It offers the services of commercial debt collection. It also handles the legalities of the shipping industries.
Pair Finance
Pair Finance is a debt collection startup headquartered in Germany. This startup uses Machine learning for its business customers to help recover from debts. This AI-Based fintech debt collection agency was founded in 2016. It helps in finding Digital debt collection partner.
CollectionHub
Collection Hub is London-based debt collection startup. It was founded in 2020. It is an end-to-end debt collection service. It deals with late payments, factoring, and international litigation and provides quick and effective solutions for receivable management. They connect global companies to help business in hiring debt collection agencies.
Captira
Captira offers automatic tools for debt collection. Its software facilitates discounts and dispute management. It even provides customization of plans for the customers. It was founded in Albany, New York in 2005. Through its software, Captira helps businesses to follow-up, escalate, and help customers pay unpaid accounts. Its web-based software helps businesses in gettin receivable paid faster and improve cash flow.
Conclusion
It's very crucial to choose the right debt collection agency for your business. You need to understand the processing and management of how the collection procedure is completed. Also, the maintenance of your bond with the consumers is an important step in debt collection. Debt buyers focus on the accounts with past due and purchase likewise. It possesses trained staff who are well aware of the regulations and ordinances of debt collection.
Small businesses require a good level of a debt collection agency as it suffers the most due to unpaid invoices. You need to find a company that does not charge upfront and has a transparency of price. Moreover, it's important to have such an agency that uses multiple channels to contact its customers. Through this article, we covered the top level of debt collection of the agencies.
FAQs
What does a debt collection agency do?
Debt Collection agencies collect debts and payments from individuals or businesses who have failed to pay the money they owe for goods, services they have received.
Which are the best collection agencies?
If you are wondering about the best collection agencies, then here's the list of the top 10 best collection agencies:
- Atradius Collection
- Summit Account Resolution
- PRA Group
- The Kaplan Group
- Rocket Receivables
- Rozlin Financial Group
- Encore Capital Group
- ACA International
- Consumers Financial Protection Bureau
- National Consumer Law Center
What is the future of debt collection in India?
Like most industries of today, the debt collection sector is largely embracing the cutting-edge technologies including AI. This is why in the future, the debt collector's role could go to a bot.
What is a debt recovery plan?
Debt recovery means taking back control of your financial future without getting any (or more) black marks on your credit rating.
Does debt expire?
In most states, the debt itself does not expire or disappear until you pay it. Under the Fair Credit Reporting Act, debts can appear on your credit report generally for seven years and in a few cases, longer than that.
