5 Credit Headaches that Pain Small Business Owners

Aug 15, 2018

All micro-businesses know how difficult it can be to achieve the state of success they’d wish for their firms especially when funding is inadequate. And regardless of your source of financial backing— whether from conventional banks, an alternative lender, or an angel investor— it is essential that your credit remains rock solid.

According to a survey by Nav, the financial firm supporting thousands of micro-businesses, 26% of retailers shy away from hiring staff and implementing expansion strategies due to financial challenges.

Discover some credit struggles below and eliminate the barrier that may be blocking you from achieving your funding goals.

1-No Credit History

Unlike personal credit that you don’t need extra effort to establish, building business credit requires that you take proper steps to make sure all your company’s transactions are part of your business credit history— or you miss the chance to boost your credit score.

2- Scanty Knowledge about Credit Scores

Until you understand how credit scores work, credit opportunities will keep passing you by. Most retailers don’t know they can still get funding even with a score of 180— different entities and vendors have their models. For instance, scoring 160 on the FICO SBSS model may earn you credit with banks like RBC, USBank, and PNC.

Get familiar with business credit score models before you seek new credit so that you know what options you have before ruling yourself out as unworthy—remember; getting a merchant account with bad credit is possible.

3-Poor Business Registration

Is your business on your state’s registry, or will your potential credit providers spot it on the list of outdated companies? Insufficient registration details hinder the process of establishing credit history which will essential for future business expansion.  And for those running multiple small businesses, be sure to register each entity separately.

 4-Funding your businesses with your Personal Credit

When starting off, it makes sense to tap into your personal credit card to pay for stuff like office supplies, purchase inventory or book a plane ticket. But credit experts advise that you should take advantage of the card offers that roll in when your firm is up and running. Shifting to business credit and seeking out more of such offers is the only way to establish credit for your starting business.

5-Failing to benefit from Credit Card Perks

On top of building your firm’s credit history, Business cards are a perfect way to get cash back, save some money and get free airplane miles. The more your company utilizes and pays back credit, the more perks you’ll get on your new business card. Don’t hesitate, compare deals and to grab new cards so that you can take advantage of perks. These extra dollars can prove useful in times of financial constraints.

Wrap Up

As you can see, it is crucial that you learn more about credit so that you do not suffer when you company is pressed for finances.

Let us help you get a high risk merchant account today!

Get Started

Award winning.

  • 2012
  • 2013
  • 2014
  • 2015
  • 2016

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 on 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.

Live Chat