NAICS 561440 Quarterly Industry Report
Collection Agencies
Comprehensive industry research for valuation professionals, business owners, buyers, and lenders
NAICS Code: 561440Sector: Administrative and Support and Waste Management and Remediation Services (56)Updated: Q1 2026
About This Report
This industry profile for Collection Agencies (NAICS 561440) draws on data from the Bureau of Labor Statistics[6], U.S. Census Bureau, Federal Trade Commission[8], and SBA size standards database[7]. Published by Fair Market Value and updated quarterly, it provides valuation professionals, compliance officers, and business brokers with current market data. The editorial analysis reflects the independent assessment of FairMarketValue.com's research team, with all quantitative claims sourced to publicly verifiable databases.
Industry Snapshot
Key metrics for the collection agencies industry.
Share of Administrative and Support and Waste Management and Remediation Services
0.7%
By establishment count, 2022 Census[2]
NAICS Sector
56
Administrative and Support and Waste Management and Remediation Services
Industry Definition & Overview
Collection Agencies (NAICS 561440) encompasses establishments primarily engaged in collecting payments for claims and remitting payments collected to their clients. These third-party debt recovery firms operate on behalf of creditors across healthcare, financial services, retail, and telecommunications sectors per the U.S. Census Bureau[5]. The industry generates about $13.6 billion in annual revenue.
About 5,467 businesses employ roughly 93,000 workers nationwide. Market structure is fragmented; most firms are small, though consolidation has accelerated as private equity investors target the sector. Contingency fees account for about 92 percent of revenue, with rates ranging from 15 to 50 percent of recovered amounts depending on debt age and difficulty per the Bureau of Labor Statistics[6]. Fresh debts under 90 days command lower percentages, while aged portfolios over two years incur higher fees.
All collection agencies must comply with the Fair Debt Collection Practices Act, which prohibits abusive, deceptive, or unfair practices. State-level regulations add further complexity. Employment has declined about 6.4 percent annually over the past five years as AI-driven automation replaces manual collection activities. Per the SBA Table of Size Standards[7], the size standard is $19.5 million in average annual receipts. New York (725 establishments), California (706), and Texas (525) lead in geographic concentration.
What's Included in This Industry
- Account and delinquent account collection services
- Bill and debt collection on contract or fee basis
- Tax collection services on behalf of government agencies
- Contingency-based payment recovery
- Skip tracing and debtor location services
- Payment arrangement negotiation and settlement
- Credit validation and account verification
- Consumer debt collection across healthcare, retail, and finance
- Commercial and business-to-business debt recovery
- Automated collection processing and workflow management
NAICS Classification Hierarchy
| Level | Description | Code |
|---|---|---|
| Sector | Administrative and Support and Waste Management and Remediation Services | 56 |
| Subsector | Administrative and Support Services | 561 |
| Industry Group | Business Support Services | 5614 |
| NAICS Industry | Collection Agencies | 56144 |
| National Industry | Collection Agencies | 561440 |
Related NAICS Codes
| Code | Description | Relationship |
|---|---|---|
| 561491 | Repossession Services | Repossession Services recover tangible collateral from delinquent borrowers, while collection agencies focus on recovering monetary payments through communication and negotiation |
| 561450 | Credit Bureaus | Credit Bureaus compile and maintain credit data that collection agencies both report to and draw from when assessing debtor financial profiles |
| 561499 | All Other Business Support Services | All Other Business Support Services captures fundraising and other telephone solicitation activities that share outbound calling operations with collection agencies |
| 561422 | Telemarketing Bureaus and Other Contact Centers | Telemarketing Bureaus and Contact Centers provide call center infrastructure that collection agencies either operate in-house or outsource for high-volume debtor contact campaigns |
| 561110 | Office Administrative Services | Office Administrative Services provide back-office support including document management and filing that collection agencies need for regulatory compliance documentation |
| 522299 | International, Secondary Market, and All Other Nondepository Credit Intermediation | All Other Nondepository Credit Intermediation includes factoring and receivables management operations adjacent to but distinct from third-party debt collection services |
Geographic Concentration
Top states by share of national establishments.
| # | State | % Est. | Total Est. |
|---|---|---|---|
| 1 | New York | 10.0% | 309 |
| 2 | California | 9.5% | 294 |
| 3 | Texas | 8.3% | 257 |
| 4 | Florida | 7.5% | 233 |
| 5 | Pennsylvania | 3.9% | 121 |
| 6 | Illinois | 3.8% | 118 |
| 7 | New Jersey | 3.3% | 102 |
| 8 | Georgia | 3.2% | 100 |
| 9 | Ohio | 3.0% | 93 |
| 10 | Washington | 2.8% | 86 |
% Of Establishments
0%
10%
Source: County Business Patterns, U.S. Census Bureau[3]
SBA Lending Summary
112
Total SBA Loans
$48.9M
Total Loan Volume
$437K
Average Loan Size
10 yrs
Average Loan Term
10.45%
Average Interest Rate
1,256
Jobs Supported
Source: SBA 7(a) Program Data, U.S. Small Business Administration — FY 2025[4]
Key Insight: Per the SBA Table of Size Standards[7], Collection Agencies (NAICS 561440) has a size standard of $19.5 million in average annual receipts. SBA 7(a) loans[9] support technology investments, compliance systems, facility expansion, and working capital for qualifying collection firms. The contingency-based revenue model creates uneven cash flow that SBA financing can help stabilize during portfolio ramp-up periods. Additionally, 504/CDC loans[10] provide long-term, fixed-rate financing for major fixed assets such as real estate and equipment.
Top SBA Lenders
| # | Lender | Loans | Volume | Avg Loan |
|---|---|---|---|---|
| 1 | The Huntington National Bank | 24 | $16.1M | $670K |
| 2 | Newtek Bank, National Association | 16 | $14.0M | $875K |
| 3 | The Bancorp Bank National Association | 16 | $7.7M | $483K |
| 4 | U.S. Bank, National Association | 8 | $6.5M | $813K |
| 5 | Heritage Bank Inc | 8 | $1.2M | $150K |
Frequently Asked Questions
Common questions about this industry.
What types of businesses operate as collection agencies?
Collection firms range from small local operations handling a few hundred accounts to large national firms managing millions of accounts across multiple debt categories. About 5,467 businesses operate in this sector per the U.S. Census Bureau[5]. Specialization is common; some agencies focus exclusively on medical debt, others on financial services or commercial collections.
How is the collection agency industry structured?
The market is fragmented with mostly small firms, though consolidation is accelerating. Contingency fees account for about 92 percent of revenue per the Bureau of Labor Statistics[6]. Fee rates range from 15 percent for fresh debts under 90 days to 50 percent for aged portfolios over two years. Private equity investment has driven recent merger activity.
What is the SBA size standard for Collection Agencies?
Per the SBA Table of Size Standards[7], NAICS 561440 has a size standard of $19.5 million in average annual receipts. This determines eligibility for SBA loans, federal contracting set-asides, and small business programs.
What NAICS codes are related to collection agencies?
Related codes include NAICS 561491 (Repossession Services), NAICS 561450 (Credit Bureaus), NAICS 561422 (Telemarketing Bureaus), NAICS 522299 (Other Nondepository Credit Intermediation), and NAICS 561110 (Office Administrative Services). Each involves complementary debt recovery or credit management functions per the U.S. Census Bureau[5].
Which industries rely most on collection agencies?
Healthcare providers generate the largest volume of accounts placed with collectors. Banks and credit card issuers place delinquent consumer loan balances. Telecommunications and utility companies outsource overdue account recovery. Student loan servicers and auto lenders are also major clients.
What activities are included in NAICS 561440?
Core activities include collecting overdue accounts, negotiating payment arrangements, skip tracing to locate debtors, validating debts, processing payments, and remitting recovered funds to clients per the U.S. Census Bureau[5]. Agencies must comply with the Fair Debt Collection Practices Act throughout all activities.
Can collection agency businesses get SBA loans?
Yes, firms meeting the $19.5 million size standard qualify for SBA 7(a) loans[9] covering technology systems, compliance infrastructure, facility expansion, and working capital. SBA financing helps stabilize cash flow during portfolio ramp-up periods when contingency fees lag account placements.
Which states have the highest concentration of collection agencies?
New York leads with 725 establishments, followed by California (706) and Texas (525) per the Bureau of Labor Statistics[6]. These states' large populations and dense credit-driven economies generate substantial delinquent account volumes requiring third-party recovery.
Sources & References
Government datasets and editorial sources used in this report.
- [1]U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages bls.gov
- [2]U.S. Census Bureau, Economic Census census.gov
- [3]U.S. Census Bureau, County Business Patterns census.gov
- [4]U.S. Small Business Administration, SBA 7(a) Loan Program Data data.sba.gov
- [5]U.S. Census Bureau census.gov
- [6]Bureau of Labor Statistics bls.gov
- [7]SBA Table of Size Standards sba.gov
- [8]Federal Trade Commission ftc.gov
- [9]SBA 7(a) loans sba.gov
- [10]504/CDC loans sba.gov
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