Why Personal Credit Matters When Looking for Business Credit

Aug 11, 2015

When looking for business credit, the first thing that you should think about is whether your own credit history is good enough. While it’s important to keep personal finances separate for finance and accounting purposes, lenders will want to check your personal credit history when making a decision on whether or not to extend you the credit.

Think about it…, lenders are in the business to make money. However, they are also aware that more than 50% of small businesses in the U.S. fail within the first five years. If they were to lend to just anyone who presents a business plan, then they would we taking a huge risk. If the business fails then the lender might not be able to repay the credit. If this trend continues for a few months, the lender might be forced out of business.

In most cases, if you’re just starting out, you may not have a business history to show for. In such circumstances, the lender might request to see your own personal credit history. If you have a good history then the lender might be led to believe that you’re responsible enough to honor your obligations. Therefore, you will likely get the credit. However, if your credit history has been poor for a significant period, then you may be viewed as unreliable and, therefore, could be denied credit.

On top of personal credit, some lenders ask for a personal guarantee of the business loan. Unless you’re desperate for the loan (which is an awkward position to be in), you need to decline such guarantees. Personal guarantees on business credit can impact your personal credit. Basically, it grants the lender permission to come after your personal assets if your business fails.

Unfortunately, you may be forced to enter into such an agreement especially if you don’t have a strong business credit. However, once the business takes off and you develop a solid business credit, then your personal credit may not really be affected. However, if you stick to your home business no matter how good your business credit is, then some lenders might still want to you to disclose your personal credit before extending you a loan. This can be frustrating but sometimes you have no otherwise.

This is why you need a bad credit merchant account to help you get business loans without much trouble. You can get such accounts from emerchantbroker.com.

Let us help you get a high risk 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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