To accept credit and debit cards from your customers, you will need to first secure a merchant account. Easier said than done? One of the biggest reasons merchants struggle to secure an account is because of bad credit. If your struggling with bad credit from a previous business venture – or other circumstances – you will be glad to hear that there are still options available to you.
Each merchant processor will have their own criteria when it comes to offering you a merchant account. For example, most processors will check your credit when you apply. Alternative processors – like eMerchantBroker.com – are much more forgiving when it comes to bad credit. With EMB, businesses with bad credit or no credit can easily secure the merchant account they need.
Before choosing a processor and submitting your application, there are a few things you must consider:
How a merchant account processor pulls your credit will depend on how your business is structured (e.g. Limited Liability Company or a C-corporation); that is, whether they pull your personal credit or business credit. If your business is an LLC, for example, the processor may pull your business credit, not your personal. Before you apply, make sure you contact the Internal Revenue Service and request an employer identification number – a requirement for credit card processing.
Credit and Discount Rate
Your credit typically determines the discount rate you pay to process your customers credit cards. With each swipe of a card at your terminal, a percentage (discount rate) is paid to the merchant. The lower the rate, the more money your business keeps from each transaction. Unfortunately, bad credit will influence the discount rate you pay; anything below 619 is considered poor credit and will involve a higher discount rate. Unless, you work with a processor like EMB that specializes in working with merchants struggling with bad credit.
Most merchant processors will deny your account application when they see that you have bankruptcy listed on your credit report. To make matters worse, bankruptcies will remain on your credit report for ten years. Again, your business can still secure the processing it needs with a high-risk processor like EMB. In fact, you can easily secure a bad credit merchant account with instant approval.
If you are overwhelmed with bad credit, never fear. Simply take a little extra time to research all your options, consider the fees involved and choose the one that best fits your business’ unique needs and situation.