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How Businesses Can Obtain A Merchant Account With Bad Credit
Everyone is aware of the adverse effects of bad credit on a person’s life. As people may not be able to acquire some of the necessary things they require with bad credit, so also, no business can survive on its own if it has imperfections in its credit history. As a matter of fact, such businesses may have a tough time covering maintenance costs or buying supplies, as most vendors will not want to extend a line of credit to them. Businesses with bad credit might also struggle to find customers.
These days, most people prefer to make use of credit cards for purchases due to their ease of handling theft or fraud. So, in order not to lose potential clients, many businesses are already accepting credit cards. It is needful to know that a merchant account is required for any business looking to accept credit cards from its customers. When applying for a merchant account, processors often check the business credit.
Interestingly, businesses can obtain a merchant account with bad credit. When applying for a merchant processor, there are several options to take under consideration. Typically, most merchant account processors are lenient with customers with bad credit.
Most merchant processors will deny any business its account if it has a bankruptcy listed on its credit report. Unfortunately, it can stay on its credit report for a long time (up to 10 years). Any business seeking to acquire a merchant account with bad credit should shop around for a merchant account. This is well recommended because they stand a chance to have their account approved at a higher discount rate even with a bankruptcy.
Regardless of its credit, a business can easily obtain a merchant account a bank particularly if it has a business account with the bank. If the business has other positive accounts with the bank, the institution may like overlook its blemished credit. When a business opens a merchant account with the same bank that maintains its checking account, it’s sure to enjoy lower start-up costs. However, it’s very needful to note that not all banks offer merchant accounts.
Credit and discount rate
A bad credit is obtained when a business’ credit score is below 619. Any business seeking to obtain a merchant account with bad credit must ensure that it has exhausted all its options for a merchant processor before accepting a remarkably high discount rate based on its credit. The discount rate that must be paid to process credit cards can be determined by the business’ credit. Businesses with bad credit may have to pay a higher discount rate with can affect every transaction. Apart from the discount rate, businesses should also be concerned about other fees such as voice verification, application, and lower equipment.
Rather than pull the personal credit, merchant account processors may choose to go along with the business credit of businesses structured as a C-corporation or a Limited Liability and possess an employer identification number. For business owners with a corporation, the merchant processor may want to verify their identity by checking their credit.
Merchant Account Bad Credit
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