Bit of a late answer, but debt collection companies use their arrangements as a form of security to borrow more money to buy more debt.
For theoretical sake, lets say that on average 50% of people who agree to pay their debt actually do so. Now lets say they have $100,000 in debt that people have made a promise to pay. The collections company would say they now have $50,000 in secured revenue.
The collections company would now use that security to go to the bank, borrow money against it, and buy more debt. Less need for cash on hand.
CLH Price at posting:
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