Free VC Directory
With any B-Plan Purchase
425 Page Capital Directory
Through Apr. 30


Business Plan Writer
$425 Flat Rate
No Templates Used
7 Day Turnaround

All Purchased Plans

Are Updated for 2017



Free VC Directory

With any B-Plan Purchase
425 Page Capital Directory
Through Apr. 30


Business Plan Writer
$425 Flat Rate
No Templates Used
7 Day Turnaround

All Purchased Plans
Are Updated for 2017


Debt Collection Agency SWOT Analysis

 

Strengths

 

Whether the economy is doing well or poorly, people will default on their debts. During times of economic duress, debt collection agencies often see their revenues increase substantially. One of the other strengths about these businesses is that they are able to generate highly predictable streams of revenue from their operations. The costs associated with launching a new debt collection agency are relatively low (the primary costs are getting an office up and running). These companies have the ability to generate income from servicing debts owned by third parties as well as for their own account (via the bulk purchase of debts).


Weaknesses

 

Debt collection agencies are currently going through a change in regulations after years of having very few laws apply to their operations. This trend is expected to continue in perpetuity as people heavily value their credit scores and profiles. These companies are going to be required to properly report all collection activities to the major credit bureaus. Another one of the weaknesses for debt collection agencies is that there is a substantial amount of competition in this field. Any individual can registered themselves as a debt collection agent. As such, there is competition to acquire quality debt collection leads.

 

Opportunities


For most debt collection agencies, the primary way that these companies to grow is by acquiring defaulted debts with the intention to collect on them for their own account. Usually, bulk debts can be purchased for pennies on the dollar. However, there is very little standardization as to how these debts are sold. As such, a debt collection agency must conduct as tremendous amount of due diligence prior to making these purchases.

 

Threats

 

As discussed in the weaknesses section, the regulations facing debt collection agencies is expected to grown substantially over the next five years. The Consumer Protection Financial Bureau will continue oversee the operations of these businesses, and new rules will be implemented as to how and when a debt can be collected. Although these are threats faced by debt collection agencies - in the long run these may actually end up benefiting the industry as standardization of collection practices and debt sales occurs.


Be sure to take a look at our Business Plan Templates.