Learn how to apply for an in-state or out-of-state collection agency license in Washington.
Who needs a license?
You need a collection agency license if you:
- Use a name other than your own when contacting a debtor to collect a debt owed to you
- Have a business that solicits, collects, or attempts to collect debts on behalf of a third party (client)
- Have a business that purchases delinquent or charged-off debts for collection purposes (whether it collects the debts itself or hires a third party to collect the debts)
Washington is a closed-border state. You must have a license before contacting debtors or soliciting clients in Washington.
Who issues collection agency licenses?
We issue this license, but it's processed by the Department of Revenue's Business Licensing Service (BLS). BLS prints it on the business license they provide. They refer to licenses issued by us as endorsements to the business license.
How to apply
Follow the steps below to apply for a collection agency license.
1. Register with the Washington Secretary of State
You must register with the Secretary of State (sos.wa.gov) before applying for a collection agency license.
2. Determine the type of license you need
The type of license you need depends on your situation.
In-State Collection Agency License
You need a Collection Agency License (in-state) if:
- Your main office is located in Washington, or
- You have, or plan to have, clients located in Washington. In this case, you also need a business office located in Washington and managed by a Washington resident.
Out-of-State Collection Agency License
You need an Out-of-State Collection Agency License if you are contacting debtors in Washington, either directly or through a third party, who owe money to you or your out-of-state clients.
3. Open a trust account
You must open a trust account at a federally insured bank for the money you collect on behalf of your clients. Your account must have enough funds to pay all your obligations to clients.
If you have an in-state collection agency, the bank you choose must be located in Washington.
If you're a debt buyer, this requirement doesn't apply.
4. Complete the required documents
You must submit these documents to get your license.
License application forms
Complete these forms to apply for a business license:
- A Business License Application
- A Business License Application Supplement for Collection Agency, Branch Office, or Out-of-State Office for each business location
Fill out a Business Financial Statement/Balance Sheet showing all of the following:
- Your agency's liabilities and assets in one of the three months before you apply (For example, if you apply in May, you may submit a financial statement for February, March, or April)
- $7,500 or more in cash or its equivalent
- You must deposit $5,000 of this money in a bank account you use to operate the business
- Equity or net worth of $7,500 or more
You must agree to pay a $5,000 surety bond. Ask your insurance company to fill out a Collection Agency or Out-of-State Collection Agency Surety Bond form and include their power of attorney form.
5. Submit your application
You must pay the collection agency licensing fees when you submit your application. Choose the method that works best for you.
Apply for your license online
You'll receive your license faster by applying and paying online.
Apply online at the Department of Revenue's website.
Apply for your license by mail
Mail your forms and a check or money order for the license fees (payable to the Department of Revenue) to:
State of Washington
Business Licensing Service
PO Box 9034
Olympia, WA 98507-9034
After we have received all required documents and payment, you'll receive your license or denial letter within three weeks.
If you have a change of address, please notify the Department of Revenue's Business Licensing Service by email at BLS@dor.wa.gov or by mail at the address above. Please include your UBI number.
Exceptions for out-of-state collection agencies
If your agency is located out-of-state, you may be able to waive certain requirements.
Surety bond waiver
You don't need a surety bond if you already have the bond or a legal alternative required by the state where your agency is located. Include these documents with your application to request a waiver:
- Proof that your bond is current
- A copy of your home state regulations regarding collection agency bonding requirements
Licensing fee waiver
You don't need to pay the licensing fee if your agency is licensed or registered in a state that does not require a fee for similar out-of-state collection agencies. To request a waiver, include a copy of your home state regulations regarding collection agency fees with your application.