Turn your high-risk, poor-credit situation into a Business Driver
As in life, never allow a label to define you. Being high-risk and having poor business credit does not mean your business will fail.
Many businesses will find themselves labeled high-risk by traditional banks. Many of these same businesses also struggle with poor credit, which means their access to traditional financing is limited. To many entrepreneurs this can seem disastrous. Fortunately, for the creative business owner, there are ways to turn misfortune into growth, and avenues for seeking out alternative funding. If your business is in a similar situation here’s how you can do the same:
Owners should work on leaving behind conventional ideologies, and not be defined by their high-risk classification.
Change your Mentality
When the prospect of obtaining traditional financing becomes challenging, many owners simply give up. Instead of looking for funding alternatives, they cut costs and downsize in an effort to dedicate revenue for credit reparations. This is the wrong approach.
Owners should work on leaving behind conventional ideologies, and not be defined by their high-risk classification. Instead they should refocus their efforts on new opportunities, adopt more aggressive growth strategies, adjust overall business goals, and research alternative funding solutions.
Here’s three things we’ve seen business owners do in order to turn their high-risk status into a daily motivator. Any good entrepreneur can become an expert in turning around setbacks. It just requires a change in mentality.
Create a stretch goal for your business
What is the vision for your business? Take a step back and think about the future of your company and its overall goals. What does your business look like in two-years’ time? Don’t simply focus on margin and daily revenue, but on operations, employment, and production. Try to imagine a business with radically lower costs, and substantially higher revenue.
In particular, consider current technological trends, especially those that are disrupting the market. Consider how harnessing this technology could improve your day-to-day operations. Learn to utilize more cost-effective solutions for your internal team; consider a remote office structure, hiring contractors instead of full-time employees, and outsourcing costly work to more economical markets. Consider automating payroll, invoicing, scheduling, document management and other tasks.
By looking down the road and adapting to the changing landscape of business, you can create new stretch goals for your company, pushing the limits of what you thought you could achieve.
Radically expand your reach
To improve growth and overcome poor credit setbacks, work towards expanding your client base. Its’ important when trying to generate new capital and grow, that you identify strategies for increasing your reach using marketing tools, affiliate programs, and paid lead sources. Content creation, like blogs, videos, webinars, and e-books, can help to widen your funnel and introduce more prospects to your business. Use social media to increase visibility, garner followers, and market to them strategically. Use these platforms to engender trust and build relationships with your content consumers. With diligence, you can simply and effectively turn your audience into paying customers.
Use technology to find new sales opportunities
Business owners can utilize inexpensive technology to expand their client base, and subsequently improve revenue. Use a CRM platform to open a line of communication with your potential clients. Leverage social media, comments from your blog, surveys, and email to reach out to customers and build relationships. Put proper support channels in place, using live site chat to engage with both existing and new customers. Use these methodologies to upsell other products or services. Using technology as a sales tool is a great way to dramatically increase revenue without incurring the costs you might associate with hiring a new sales team member, or using traditional advertising sources.
Take advantage of alternative funding
Many business owners discover they’ve been defined as high-risk when they begin looking for a traditional bank loan. Unfortunately, the need for a loan usually coincides with an exciting new growth opportunity that requires investment, like hiring new staff, or developing new products and services. Although traditional sources of funding may not be available to high risk businesses, this doesn’t mean there aren’t numerous alternatives for acquiring working capital.
Burgeoning technologies have made it possible for new firms to offer funding to a much wider variety of businesses then was traditionally possible, matching high risk businesses, and businesses with credit concerns to lenders willing to take on the additional risk. These companies, like our partner First American Merchant, are even able to provide alternative financing in less time, with fewer requirements, than traditional banks.
Being declared High Risk is not a setback. Those owners with an entrepreneurial mindset can easily refocus their efforts, rethink their plans, and readdress overall goals. If you find yourself in this position, meet the challenge head on. Leverage technology and automation to dramatically expand your market and streamline operations; and use alternative funding sources to capitalize on growth opportunities.
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 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.