23 Mar What is a Guarantor in the Merchant Account World?
When opening a merchant account, one will want to find a company that offers it all. However, when trying to get a new account, a lot of people struggle. Yes, if a company owner has a lot of debt or problems financially, he or she may have to do more to get an account, especially if they run a high-risk company. Luckily, when looking to get an account, one can provide a guarantee. With this in mind, here is a short guide explaining what a guarantor is.
Show balance sheet:
First and foremost, when a person shows their balance sheet, they will have an easier time opening the account. Think about it, if the merchant provider looks at the balance sheet and sees a lot of cash, nobody will have a hard time working the company money. On the other hand, when looking for a merchant account and a person doesn’t have money, they will have a harder time getting an account. But, when looking to open a merchant account with no money in the bank, a person has other options.
Letter from the bank:
Now, most entrepreneurs will have a bank account, and they will usually have a decent relationship with their bank. For this reason, when looking to for credit card processing, one will want to talk to their bank. That is to say, one should get a letter from their bank or lending institution telling everyone that he or she has backing from the bank. However, when one doesn’t have an account or has an account in bad standing, this is a bad option. In the end, when looking for credit card processing, one will have other options to get that they want.
Hold back some funds:
Finally, a lot of entrepreneurs are in a different place as they start out early without a lot of cash or banking. When this happens, they can have the company withhold some of the funds. Then, when things are okay, the company owner will receive the owed funds. This is the easiest and fastest way for a company owner who doesn’t have much standing yet.
When looking to accept payments via credit card, one should have an account. While true, it’s not always easy to open an account, especially if a person has no standing. Luckily, with a guarantor, one will have an easier time opening their account and maintaining it.