There are so many reasons why collection agencies are needed and there is so much potential for your collection agency. You provide a much needed service to all businesses, yet your collection agency merchant account remains at a high risk status. This does not matter whether you are dealing with individual consumers or business-to-business industries.
The reason you opened your agency was to make a good living, and there is plenty of potential money out there. When you are dealing with a new customer or even a long-standing customer it can only increase your potential by explaining some facts of life to your client. If you are in the B2B collection industry you are dealing with company owners who may have formed close associations with the people who owe money.
Explain to your client that he is in business to provide income for him, his family and his employees. No one has the right to jeopardize this cash flow. While the customer who has an over 90-day account may be experiencing financial difficulties, this is not the client’s fault. Just about everyone at some time or another has had a cash flow problem. This fact does not mean that the debt will be cancelled. Your client wants and needs his money. You can contact the customer who is extremely late in paying his bill and work out a comfortable payment arrangement.
Also explain that the longer he waits to put his customer in collections, the customer may begin some sort of bankruptcy proceedings, which is something he does not want. The quicker you are assigned the debt, the better your chances of collecting the balance due. Payment from the customer can be directed to your collection agency merchant account.
Another benefit of dealing through you is that you keep your client and his employees out the collection process. They are able to spend their days performing work that brings in new money. Plus, it takes out the personality issue. There are not too many individuals who listen to a hard luck story that will not sympathize with the customer. Your client will not have to have anyone listen and sympathize. He will have you listen and offer solutions.
So, if you provide these services, why are you a high risk merchant? You are on a cash only basis and do not carry a lot of debt. It is not you per se. It is the type of person who is paying you. Many debtors will set up recurring billing and when you subtract the funds from their accounts they cry foul and there are chargebacks. Then there are the debtors who had no intention of paying the bill and could close their charge account – or have it closed by the issuer. You are not dealing with the upper crust.
There is a high risk specialist who knows the ins and outs of a collection agency merchant account. More than likely a conservative processor or traditional bank will not give you a second look. The high risk specialist can have you approved in as little as 48 hours – even if you are opening a new business. You do not have to have an exemplary credit score plus there are never any application fees.