How to Start a Business with Bad Credit

Oct 20, 2016

Do you own a small business, but can’t find reliable payment processing because of bad credit? Don’t let bad credit stop you from starting your business. A new study shows that only 25 percent of merchants are turning to banks for financing. Instead they use more efficient and less restrictive methods to get the critical funds necessary to grow their businesses. The following are a few ways that businesses with bad credit are securing funding.

Micro Lenders

If your business’ credit is between 300 and 629, you should consider a micro lending option. Micro lenders generally dish out small to medium-sized loans between $3,000 and $35,000. Micro lenders don’t have as many restrictions as banks, and have much faster approval times.

Merchant Cash Advances

MCA’s are also a popular choice for companies with bad credit. Providers are repaid by using a predetermined percentage of a merchant’s daily credit card receipt volume. This means that on slow days, merchants pay less to lenders than when business is booming.

Getting a Co-signer

Another way to get funding is to find a partner with good credit that is willing to co-sign a loan. But co-signers should understand the possible risks. If merchants are late with payments, or default on the loan, the co-signer’s credit will also suffer.

Social Lenders

Some merchants opt to skip official lenders and applications altogether. Instead they go straight to their target audiences and potential investors for money.  Many entrepreneurs have found great success with social lending websites. They simply create a message or business plan/proposal and broadcast it across the world. This drastically increases their chances of finding investors.

Use Financial Assets

If your business is less than a year old, a good way to raise capital is to use equipment lenders. These lenders use office equipment as collateral, and place far less emphasis on personal credit.

EMB specializes in working with bad credit merchant accounts. Get quick, simple, and straightforward, services and funds 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 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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