Debt Collection Agency Business Plan Sample Template

Do you need help starting a collection agency? If YES, here is a sample debt collection business plan template.

Credit is an important part of doing business. Credit is to a business what fuel is to a car. While this is good for businesses, a lot default on their debt repayments. This is where collection agencies come into the equation.

Here, I will be talking about the things that are required of you in opening a collection agency startup. A collection agency is the type of business that does not require experience or training and is quite profitable.

Lots of people and businesses need collection businesses that will stand on their behalf to collect debts from whoever is owing to them.  This is a thriving business that you can decide to go into; you don’t even need a special qualification or training to open a collection agency.


A collection agency stands as a third party in collecting debts on behalf of businesses; most times the debt is collected from customers of that particular business.

Here is a sample business plan for starting a collection company.


How do you become a debt collector? To open a collection agency, feasibility study comes first. It is a research done to examine the market of the business you are about to start, the risks of the business, challenges you are likely to face in the business and how to overcome them, and advantages of the business.

You can also use a feasibility study to look into fellow businesses and to know companies and businesses that you need to create a relationship with in regards to the success of your business. With the help of a collection agency feasibility study, you can also get information on the best location for your business where demands for your operation will be very high.

Getting a good location for your business is very important and also contributes to the success and profitability of the business. You also get to know the state of the economy of the country of your business and how to make it benefit your business.


What licenses do you need to start a collection agency business? It is crucial that you know what is required of you legally in the collection agency such as knowing the federal and state collection agency laws. Knowing the laws guiding a collection agency especially the federal laws is essential because each country has its own regulations on how debts should be collected from business owners or consumers.

Another important thing is the obtaining of license which can be easily done by contacting the finance officer of the state where your collection agency will be established. Contacting him or her (the finance officer) will help in getting more information about the registration details; to know if there are more licenses to obtain.


Here, you don’t really need much capital to open a collection agency. And you can even decide to be operating from your home; it is quite possible. You will have to raise the capital needed for your business. You might decide to finance the project yourself, raise money from private investors or get a loan from banks.

The extent of how much you will be spending on starting your business depends on the size of your business. If the business will be big then your capital will be a bit high and if it is a small business, then your expenses will be minimal.


Writing a debt collection business plan for your business is also important. A business plan is a single document that comes in handy when looking for investors or when you want to borrow loan from the bank. Apart from that, it also serves as a guide in the operation of your business.

A business plan contains everything about the business including financial cost, sales and marketing strategy, business structure, mission and vision statement, executive summary, business overview, possible problems to be encountered and how to solve them, and so on.

There are samples of business plan online for people to use as a guide in writing their own collection agency business plan which you can also use as a sample to make the task easier.


This aspect has to with securing a facility or constructing a building for your collection agency and buying the equipment and facilities that will be needed in the course of operation. You will have to put the location, size of the business whether large or small and spacing of rooms into consideration.

In building your business, you also need to know the set of people your business will be focusing majorly on which most times include: hospitals, schools, book clubs, corporate organizations and so on.


It is advisable to get an insurance policy for your business because of happenings that might be beyond your control, it might be a health issue or problem with a client. Hence, the need to know the best insurance policy available that will cover you and protect your business.

When you are about starting your business, you should look into insurance policies and select the one that will work best for your collection agency. It is important.

It is important that you note that all the points listed above help a lot in opening a collection agency business opportunity and even to succeed at it. All these will build a solid foundation for your business.


A collection agency helps lenders recover bad loans from debtors. This collection agency business plan sample is provided to help entrepreneurs willing to start their own collection agency businesses.
Oftentimes problems arise when writing a plan. In some cases, this may be due to inadequate information about the business, in some the entrepreneur may have no idea on the structure of the plan. In other situations, both of these may apply.

Our sample will help you avoid all of these situations by giving you a model to follow. However, knowledge about your business is important.

  • Executive Summary

Credit Restore is a credit collection agency. We provide professional credit recovery services for our clients, saving them the stress of having to recover bad debt. Similar businesses have been sued in the past by debtors. This is due to unprofessional debt recovery practices which have caused an infringement on the rights of these debtors. We are professionals that eliminate the unpleasantness of lenders having to deal with creditors having difficulties in paying up their debt obligations.

We are located in Helena’s financial district in Montana. This is strategically located as majority of our clients are businesses within the financial services industry.

  • Our Services

Our services include debt negotiation and collection services. When a client defaults on debt servicing or repayment, it becomes classified under bad debts. This creates an unpleasant situation for most businesses trying to recover these loans. We are well trained in handling such situations. Using all legal means available to us, we recover such debts for our clients.

  • Vision Statement

Our vision is the satisfaction of our clients. Debt collection, especially bad debt isn’t an experience our clients want to have. We are committed to increasing the average debt recovery rate which stands at 70% to 85%. We will use humane and legal means to achieve this with the help of law enforcement when required.

  • Mission Statement

Our collection agency business is poised to offer the best services possible to our customers. We plan on ensuring that the parties we represent get value for their money. We will offer flexibility in the way we do business. In other words, we will structure our business in such a way that it adapts to the needs of each of our clients.

  • Financing

The needed financing for our full take-off has been raised from the sale of up to 35% shares of our company to 2 investors. These investors will each have 10% and 25% ownership respectively. This is not an indefinite arrangement as these shares have a duration or tenure of 15 years. After this period, ownership will be transferred back to us through a buy-back clause. We have raised the sum of $1,000,000.00.

  • SWOT Analysis

We understand the importance and benefits of a SWOT analysis on our business operations. This has led us to invite professionals to carry out an evaluation of our chances. This has yielded critical information that will be used to improve our structure for greater efficiency;

  • Strength

Our strength as a business is in our capacity to get the job done in record time. Majority of professionals on the management team have worked with major and successful collection agencies in the past. The insights and experiences of these professionals count in giving directions to our business operations. We will make the most use of this strength to reposition our business for increased productivity.

  • Weakness

We are a small business which is yet to be fully recognized in the financial services sector. We are already working on that by building reputation through ensuring that existing clients are thoroughly satisfied.

  • Opportunities

The collection agency industry thrives on output. The more the results obtained the better for our business. By identifying this fact, we have streamlined our activities to have a uniformed output that will result in greater impact through results which are very evident and exceptional.

  • Threats

An economic collapse is not good for our business. This is because credit flow will cease. This means that the clients we represent are unable to function optimally due to absence of credit. The resulting effects are defaulting on already borrowed credit.

  • Sales Projection

Sales for our business equal demand for our services. As a new collection agency, we are working tirelessly to attract the bigger financial institutions. The indicator of growth for the financial services industry has shown a positive sign of for the coming years.

Armed with this information, we have done a sales projection for the next 3 years. It shows the following rise in profits;

  • First Financial Year $300,000.00
  • Second Financial Year $550,000.00
  • Third Financial Year $900,000.00


  • Target Market

Our target market is defined. We will be working closely with institutions in the financial services sector. Our specific market with be the lending industry. We will help our clients who are mostly banks to get back their debts from debtors. Our expertise allows these clients to concentrate on running their businesses while we help them get back debts owed.

  • Competitive Advantage

There are other collection businesses but our unique understanding of the industry is an asset. Our professionals have put in many years of service and rising through the ranks to hold managerial positions in major collection businesses. Although we are a new business, we have a lot of understanding on how the industry functions and will use this to our advantage.

There you go! We have shown you the most important parts every plan should have. We have tried to make this collection agency business plan sample as simple as possible.

We hope you find it worthwhile and will follow the format and simplicity. The better your understanding of your plan, the more meaningful it will be.