Bad Credit Merchant Accounts
Having a less than stellar credit record does not mean you have to give up the idea of running an online business and establishing a merchant account for accepting and processing credit card and electronic payments.
Ask for Requirements
Some account providers are incredibly picky about their clients, but there are reputable and trustworthy providers out there for people with bad credit. The trick is locating them and seeing what they have to offer you. To narrow down your selection of those that are willing to work with you, ask for a list of requirements. Honest providers will be upfront with you about what they look for.
Whichever account provider you go to will want to perform a credit check. If they are okay with what they find, they will approve your account. If not, they will decline it. If you have a bad credit history, you may be asked to provide extra security.
Find Someone Willing to Co-sign
In instances of bad credit history, the merchant account provider may ask for extra security from a co-signer before approving the account. The co-signer will be someone who will serve as your guarantor and who is willing to be responsible for any debt, should you default.
Generally, the most acceptable co-signers are people who have good credit history themselves, such as a business partner or someone else who is close willing to vouch for you financially. Acting as a co-signer can be risky for the individual serving as guarantor as every bad debt you incur will reflect badly on their financial standing and mar their good credit history. Before the co-signer commits, it is important to sit down with them and talk through the implications and responsibilities.
Consider Borrowing Capital
You can sometimes help your credit record by borrowing money from a local bank. Make an appointment with one of the bank?s representatives to discuss the option and be sure to have a written business plan to present along with a document listing any supporting business history you have. For guidance on developing your business plan, do a Google or Bing internet search, which will provide a wealth of information and advice. If the bank decides to grant the loan, you not only have business capital in hand, but it also should help you obtain quicker and easier approval of an online merchant account.
Making the Application
Once you have everything in place ñ a preliminary list of requirements, a co-signer and business capital ñ you can begin looking for an account provider in earnest. Take time to do thorough research; read reviews, compare requirements, look at set-up rates and see what fees they charge (percent per transaction, etc.) You can then select the provider that closest fits your needs.
Bad credit does not have to prevent you from pursuing your own online business. With a little time, effort, and planning, you can have that merchant account approved and in place before you know it.