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Private Collection Agencies: What You Need to Know

If you've defaulted on an SBA guaranteed loan, you'll be hearing from one of four private collection agencies contracted by the Treasury.

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Private Collection Agencies: What You Need to Know

If you've borrowed an SBA guaranteed loan and you can't pay it back you'll be hearing from a collector contracted with by the Department of Treasury. Read on for what you need to know abut private collection agencies.

Debt is a complicated process, whether you're a small or large business or even an individual.

For operations making use of Small Business Association (SBA) loans, it's important to understand how your debt works.

It's easier than you might expect to fall behind on your payments

When that happens, you'll find yourself in the unfortunate position of having to deal with private collection agencies.  The Department of Treasury contracts with four private collection agencies: Performant, CBE Group, Conserve and Pioneer.

In this article, we're putting these agencies under the microscope. From who they are, to where they're registered, to how to deal with them when they contact you.

Read on to learn everything you need to know, and more.

What Are Private Collection Agencies?

Being contacted by a debt collector can be an intimidating experience.

If you have defaulted on your SBA guaranteed loan, the SBA will refer the debt to the Department of Treasury.  The Department of Treasury will then refer the debt to a private collection agency to aid with the collection process.

When you're in this situation, you have a lot of questions. Unfortunately, private collection agencies (or PCAs) aren't always forthcoming with their information.

Perhaps you haven't even been contacted by a PCA yet.

Maybe you're just aware of your small business loan and the payments you've defaulted on. If you're in this position, now is the perfect time to start researching the process, so you'll be prepared when they do reach out.

Whatever your reasons for looking into the process, the first step is to become more informed.

What exactly is a PCA?

Private collection agencies are private sector companies who collect on delinquent debts.

The Treasury will contact them after they've tried to coordinate the payments internally and come up short.

They do their job in different ways.

In some cases, PCAs will make contact with small business debtors from information on various databases. They'll make phone calls, send collection letters, and use other means to make it clear they are trying to get in contact.

Depending on how long it takes to track down the debtor, PCAs will eventually request that the remainder of the debt is paid.

Depending on what arrangement they have with the Treasury, and the nature of your debt, the PCA might suggest one of a few payment options

  • A Payment Plan: Similar to any standard payment plan, the total amount of money owed can be broken up into smaller amounts to be paid monthly, with interest. This arrangement is agreed by both parties and a contract can sometimes be drawn up.
  • Wage Garnishment: A hearing officer orders your employer to withhold a percentage of your salary and send it to the PCA each month.
  • Full Payment: In cases where the debt has defaulted or where pay agreements have been broken, a request may be made for full payment immediately.
  • An Administrative Arrangement: If you've defaulted because of a clerical error, obviously the best thing to do is correct the error before the bill compounds. The PCA may request information to help settle the problem with the office where the error was made.


As with any agency dealing with your money, it's important to know who your PCA reports to.

Depending on the state you live or work in, private collection agencies will be governed by relevant local and federal laws.

These include:

  • The Fair Debt Collection Practices Act
  • The Federal Claims Collection Standards
  • The Privacy Act. 

The Bureau of Fiscal Service has specific Task Orders for PCAs that enforce various controls and they work to promote fair treatment and accountability.

From there, Debt Management Services (DMS) monitor PCAs in their various daily activities.

Complaints directed at specific private collection agencies are sent to the DMS for review.

Once considered, further documentation will be gathered, and, if necessary, steps will be taken to correct the situation.

What Are Your Rights?

The question on many people's minds when they are contacted by a PCA is: "What are my rights?"

Let's take a look.

Legally, PCAs are not allowed to:

  • Call before 8 AM or after 9 PM
  • Contact you at work if you’ve informed them you aren't allowed to take this kind of call in the office
  • Contact someone else to find out anything other than your information. Your debt is between you and them - they aren't permitted to tell other parties.
  • Abuse you or anyone you know in order to receive payments
  • Misrepresent how much money you owe
  • Trick you into paying your debts. This can include anything from falsely claiming to be a police officer to using a fake company name
  • They aren't allowed to use false credit information. Even threatening to garnish your wages, unless specifically permitted by law to do so, is a misrepresentation.

Having to deal with a debt collector is difficult and stressful enough. Make sure you know your rights when they call.

Private Collection Agencies - The Complete Picture

PCAs are brought in to help facilitate the debt process. Their job is to inform you of how much money you owe, how you can pay it, and what the consequences are if you let it go delinquent.

Looking at them in this light helps to dilute the fear somewhat.

That said, defaulting on a debt isn't something most people have on their "bucket" list.

That's what makes receiving that dreaded phone call from a debt collector so terrifying.

Whatever your reasons for falling behind, private collection agencies have to handle your case according to the rules.

There's a framework they have to adhere to, and now that you know what that is, you are in a much better position to handle that unexpected call or letter.

Do not be afraid.

Ask questions. Find out what kind of payment plans are available.

And, above all else, make sure you assert your rights.

Are you struggling with your small business debt? You don't have to.

Reach out and talk to us today and let's start putting your debt to rest.

Why Hire Us to Help You with Your Treasury or SBA Debt Problems?

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Millions of Dollars in SBA Debts Resolved via Offer in Compromise and Negotiated Repayment Agreements without our Clients filing for Bankruptcy or Facing Home Foreclosure

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Millions of Dollars in Treasury Debts Defended Against via AWG Hearings, Treasury Offset Program Resolution, Cross-servicing Disputes, Private Collection Agency Representation, Compromise Offers and Negotiated Repayment Agreements

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Our Attorneys are Authorized by the Agency Practice Act to Represent Federal Debtors Nationwide before the SBA, The SBA Office of Hearings and Appeals, the Treasury Department, and the Bureau of Fiscal Service.



Client personally guaranteed SBA 7(a) loan for $150,000. COVID-19 caused the business to fail, and the loan went into default with a balance of $133,000. Client initially hired a non-attorney consultant to negotiate an OIC. The SBA summarily rejected the ineligible OIC and the debt was referred to Treasury’sBureau of Fiscal Service for enforced collection in the debt amount of $195,000. We were hired to intervene and initiated discovery for SBA and Fiscal Service records. We were able to recall the case from Fiscal Service back to the SBA. We then negotiated a structured workout with favorable terms that saves the client approximately $198,000 over the agreed-upon workout term by waiving contractual and statutory administrative fees, collection costs, penalties, and interest.



Client personally guaranteed SBA 7(a) loan for $350,000. The small business failed but because of the personal guarantee liability, the client continued to pay the monthly principal & interest out-of-pocket draining his savings. Client hired a local attorney but quickly realized that he was not familiar with SBA-backed loans or their standard operating procedures. Our firm was subsequently hired after the client received the SBA's official 60-day notice. After back-and-forth negotiations, we were able to convince the SBA to reinstate the loan, retract the acceleration of the outstanding balance, modify the original terms, and approve a structured workout reducing the interest rate from 7.75% to 0% and extending the maturity date for a longer period to make the monthly payments affordable. In conclusion, not only we were able to help the client avoid litigation and bankruptcy, but we also save him approximately $227,945 over the term of the workout.



Client personally guaranteed SBA 504 loan balance of $375,000.  Debt had been cross-referred to Treasury at the time we got involved with the case.  We successfully had debt recalled to the SBA where we then presented an SBA OIC that was accepted for $58,000.

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