2016: A Good Year for Merchants with Bad Credit

Feb 20, 2016

If you own a small business and have bad credit, you will have a hard time finding reliable payment processing or a loan? Bad credit, defaults, and bankruptcies can hurt the personal credit of business owners and their ability to start new business ventures. Almost 63 percent of small businesses seek out small business loans or lines of credit, but only 27 percent actually attain loans. If you are thinking of starting a business in 2016 and you have bad credit, here are a few things you should know.

While business and personal credit scores are separate, they are still intertwined. In the U.S., business scores range from 0 to 100, and personal scores range from 300 to 850. According to Experian, a business credit score includes a credit summary, corporate registration, key business facts, overview of payments and collections, and any tax liens, bankruptcy filings, or judgments. Personal credit scores are generated using the Fair Isaac Corp.’s algorithm. Individuals have the right to a free credit report, but business owners have to pay to get their business credit scores. And despite the fact that business and personal credit scores are separate, financial institutions and lenders still look at them to determine whether or not to lend out money.

If your poor credit score is keeping you from receiving a loan, you’ll have to consider alternative sources of funding.

Micro Lenders

If your credit is between 300 and 629, you should consider a micro lending option. They are a recommended option for small to medium-sized loans between $3,000 and $35,000. Micro lenders have far less restrictions than banks, and have much faster approval times.

Social Lenders. Forgo the application process all together and go straight to your potential customers or relatives for working capital. Entrepreneurs use social lending websites as a more efficient and less formal way to generate capital. The owner creates a message or business pitch to broadcast to potential funders from across the world. This is a cheap way to reach more clients than through conventional means.

Use Financial Assets. If your business is under a year old, your best option is to raise capital with equipment lenders that specialize in using office equipment as collateral. These types of loans place far less emphasis on personal credit

EMB believes that your business deserves a shot at a loan without unreasonably high interest rates or conditions. Get quick, simple, and straightforward, services from professional payment processors. EMB is the nation’s leading online small business lender with a streamlined application that is also user friendly. Contact us today to start your bad credit merchant account today.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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