Credit plays a key role in business just as it does in the personal sector. If your company is considered to be a credit risk, you may find it difficult to be approved for anything other than high risk merchant accounts. Don’t give up because high risk merchant account providers may solve your problem by offering you options others don’t.
What is Bad Credit in Business?
You know that bad credit for individuals means they didn’t pay their bills on time or maybe even at all. For a business, the definition is basically the same. A company can quickly get a bad reputation if it fails to pay vendors or other creditors on time.
Many business owners don’t realize business credit scores exist. While some of the criteria is different from what would exist on a personal account, the idea is the same. Vendors and other companies can check a company’s business credit score to decide if it wants to extend credit. A low business credit score can limit credit opportunities.
Poor personal credit from the owner will also hamper the company’s ability to apply for credit, especially if it’s a new business. If the company has no collateral, such as a service-related business, it can increase the risk.
For some companies, it may be the lack of credit which limits them. Perhaps the business is new or has always paid cash for purchases. Maybe the owner doesn’t have an established credit history. A lack of credit history, either good or bad, can make some merchant providers reject your application.
Hot to get Started with High Risk Merchant Accounts
Since almost all businesses must accept credit cards to stay in business, having bad credit can be a big problem. High risk merchant accounts providers will accept those companies that other financial institutions turn away.
Many of these merchant accounts providers charge a higher fee to provide the service for companies with bad credit. However, it allows the businesses to accept one of the most popular forms of payment for the convenience of their customers.
A company with a poor credit history can shop around and compare high risk merchant account vendors. The owner can compare fee structures and other specifics to determine which account provider offers the best terms. At the same time, the business can work at improving its credit rating by paying bills on time and establishing a positive credit history. Once the credit rating improves, it may have more options or pay a lower fee for credit transactions.
Many payment providers accept companies regardless of their history, but it can be difficult to find one offering the rates you want. You must have a checking account, but you can find providers who will accept your application. To learn more, contact MIDsource and get started accepting online credit card payments for your business today.