How Merchants with Bad Credit Still Get Loans

Jan 14, 2016

Do you own a small business, but can’t find reliable payment processing or a loan due to bad credit? Don’t let bad credit stop you from pursuing your dreams. Business owners no longer have to rely on loans from banks.  In fact, a new study shows that only 25 percent of new merchants turn to banks for financing. Instead they use more efficient and less restrictive lenders to get the critical funds necessary to grow their businesses.

eMerchantBroker knows that even good business owners can have bad credit. But even if your business has a choppy credit history, you still deserve dependable payment processing and access to loans. That’s why a growing number of merchants with bad credit are skipping traditional lenders, and choosing online lenders that want to work with them regardless of credit.

The Micro Lender Option

A merchant is said to have bad credit if their score is between 300 and 629. This type of credit score can be difficult to overcome, but micro lenders are usually willing to offer bad credit merchants a small-business loan. They are a recommended option for those who need a loan between $3,000 and $35,000 and specialize in lending to small businesses and startups. Plus micro lenders have far fewer restrictions than traditional lenders.

No matter where merchants go for funding, their chances to be attain a merchant account increase as their credit score increases. This process begins with a solid business plan and proof that you are working to improve your credit. If you’re behind on credit card payments, for example, present a plan that shows how you plan to pay down the credit card. Then prove that you can make the payments on time for a few months.

In the end, if your business can demonstrate a positive trajectory in cash flow it can be eligible for a small business loan from the right lender. Businesses with bad credit deserve easy, straightforward, and quick services from veteran payment processors. EMB is a leading online small business lender with a streamlined application that is user friendly. EMB applicants don’t worry about application fees or VISA and MasterCard requirements.

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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 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.

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