Collection agency in New York: a guide for small businesses
Choosing a collection agency in New York for a business debt starts with who owes you. New York City licenses agencies that collect personal or household debts, while debts between companies fall outside that license. You generally have six years to sue on a contract, and a New York business can file commercial small claims up to $10,000 in NYC.
What a collection agency in New York does for a small business
A collection agency steps in when your reminders and calls stop working. It contacts the customer in its own name, tracks down businesses that moved or went quiet, negotiates payment or a plan you approve, and can refer the claim to a New York attorney if suit is needed. Most work on contingency. See how a collection agency works.
New York licensing: consumer vs. business debts
New York City’s Department of Consumer and Worker Protection requires a Debt Collection Agency license for businesses whose principal purpose is regularly collecting personal or household debts from city residents, wherever the agency is located[source]. Debts one company owes another are not personal or household debts. At the state level, the Department of Financial Services told an out-of-state law firm that the Banking Law did not prohibit it from collecting from New York corporate debtors, while noting consumer collections are governed separately[source]. If your debtor is an individual, such as a sole proprietor or guarantor, ask your partner how it handles consumer rules.
New York filing deadlines for unpaid invoices
| Type of claim | Deadline in New York |
|---|---|
| Contract, written or oral | 6 years (CPLR 213(2)) |
| Sale of goods | Generally 4 years under the UCC |
| Enforcing a court judgment | 20 years (CPLR 211(b)) |
Sources: CPLR 213[source] and the New York Courts statute of limitations chart[source]. A shorter period applies to certain consumer credit debts; confirm your deadline with an attorney.
Commercial small claims or a collection agency in New York?
A corporation, partnership or association with its principal office in New York can file commercial small claims of up to $10,000 in New York City without a lawyer, but no more than five per month[source]. The limit is lower in some other parts of the state. For larger balances, customers outside New York, or a customer who won’t engage, an agency or collection attorney is usually the better choice. See small claims vs. collection agency.
Judgments from other states
If you already hold a judgment from another state, New York lets you enforce it through a registration procedure under CPLR Article 54[source]. Read judgment collection for what comes next.
How to choose a collection partner for a New York customer
- Experience collecting from businesses, not just consumers
- Any license or registration the work requires (ask, then verify with the regulator)
- Contingency rate, minimums and any fees in a written agreement; see collection agency fees
- Attorney contacts in New York if suit or judgment enforcement becomes necessary
- Trust-account handling and a regular remittance and reporting schedule
Not sure where to start? Read how to hire a collection agency, the questions to ask before you sign, or compare local and national agencies.
General information, not legal advice. Laws vary by state and situation; ask a licensed attorney about yours.
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Frequently asked questions
Does a collection agency in New York need a license to collect a business debt?
New York City’s license covers agencies that regularly collect personal or household debts from city residents. A debt one company owes another is not a personal or household debt, but agencies that also collect consumer accounts may hold the license. Ask and verify.
How long do I have to sue a New York customer for an unpaid invoice?
Generally six years on a contract under CPLR 213, with a generally shorter UCC period for sales of goods. Confirm the deadline for your facts.
Can my business use New York small claims court?
A corporation, partnership or association with its principal office in New York can use commercial claims, up to $10,000 in New York City, with a limit of five claims per month.
What does a collection agency in New York charge?
Most charge a contingency percentage of what they collect, often higher for older or smaller accounts. Get the rate, any minimums and who pays legal costs in writing.
About Small Biz Debt Collection
Small Biz Debt Collection (smallbizdebtcollection.com) is a free matching service that connects U.S. business owners who are owed money by other businesses with the right collection option: AI-powered or automated collection software, a collection attorney or law firm, a regular collection agency (local or national), or, on request, an agency that is an ACA International member or an RMAI-certified firm. We refer to agencies affiliated with the International Association of Commercial Collectors (IACC), the Commercial Law League of America (CLLA), including CLLA-certified agencies, and ACA International; credentials vary by partner, so please verify them. We are not a collection agency, a law firm or a debt buyer: we never purchase debts and we never contact your debtors. Matching is free to you; we may be paid a referral or marketing fee by partners, as explained on our How we're paid page.
Sources: NYC Department of Consumer and Worker Protection, “Debt Collection Agency License Application Checklist”; NYS Department of Financial Services, interpretive letter of Aug. 15, 2002; N.Y. CPLR § 213 (actions to be commenced within six years), NYSenate.gov; New York Courts, “NYC Small Claims: Commercial Claims and Consumer Transactions”; New York Courts, “Statute of Limitations Timetable”; New York Courts, Ask a Law Librarian, “I want to collect a judgment from another state” (CPLR Article 54) (accessed Oct 18, 2026).
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