27 Jan How to Get a Merchant Account if You Have Bad Credit?
In today’s consumer environment, people buy with plastic far more often than with paper money. Technology is making it easier than ever to accept credit cards for services and goods. Even cell phones are being equipped to swipe cards on the go, but somewhere behind the swipe is a company taking the payments and sending the funds to the business owner.
In exchange for the service of processing the credit there are fees that need to be paid. If a business owner has bad credit it can be difficult to find a processing company that will offer them an account. However, there are ways for business owners to open a merchant account with these credit card processors even when they have bad credit.
Look At Local Banks
The local bank you do business with on a regular basis may be more willing to help with credit card processing for your company. The bonus here is that startup costs and additional fees are often lower than national credit card processing fees.
Get Someone Else to Back the Merchant Account
The easiest way to back up your merchant accounts is to find a qualified co-signor. This person or company will guarantee your account. When using a co-signor, business owners can apply to any of the top-rated processors.
If it isn’t possible to use a co-signor, check out companies that specialize in helping merchants obtain high risk accounts. There are plenty of companies that focus solely on credit card processing for companies with bad credit. One way these companies help business owners get merchant accounts is by looking for overseas processors, so be sure to check out the legitimacy of the companies before signing up.
Provide Assurances for Merchant Accounts
Like any lender, it will help lessen the risks when you provide some backup in case of default. Find a provider that will accept a reserve deposit to cover a missed payment. If you cannot afford to make an initial deposit into a reserve, offer a rolling reserve. When credit is processed, the processor keeps a percentage of the funds in the account. Another form of assurance for merchant accounts is the third-party provider. An account through companies such as PayPal who take the credit processing through their system and pay you the proceeds takes the liability off of you.