No matter what type of dealing you run, whether a small shop, online store, or mail-order business, having a credit card service for customers will surely come in handy towards your business’ growth.
However, one must find a way to accept credit card payments in an instant. One has to apply to many banks for merchant status to be able to do this. But once your merchant status is established, your business will be ready.
How Does Merchant Status Work?
Your company must first partner with one or a few banks to be able to accept credit payments. Before doing so, you must apply to these banks to achieve merchant status. These banks will work with you to transfer the money paid through credit by customers within a day or two of the sale.
They will also be responsible for collecting the money from the customer. In return, your company will pay them a usual commission, ranging from 1.5 to 5 per cent for each transaction. Other fees may include monthly support and equipment rentals.
What Do Banks Look For In Companies Applying For Merchant Status?
Applying for merchant status may be similar to applying for a loan, as lenders would certainly investigate your overall financial status. The feasibility of using credit payments through your business will certainly be considered. Here are some factors that lenders will need to consider before granting you merchant status:
Your Business’ Type & Length of Time.
Lenders need to know whether granting your company the status might have higher risks for accepting credit payments. For example, home-based companies may need help to obtain merchant status than companies with stores. Aside from this, companies already established for some time, in contrast to those only starting, may be granted status quicker.
Your Sales Track Record.
Lenders would also be interested to know if your company could bring money to the table. If your company has a dependable sales track record, then the easier for you to achieve status.
Your Credit History.
General creditworthiness is given much consideration. Be prepared for your personal or business credit histories to be investigated. In line with this, lenders may also try to check with your previous merchant accounts about your business’s performance, as this gives feedback on how creditworthy you are.
What Should You Do To Achieve Merchant Status?
To prepare your company for application, you must be ready to have all information about your business as well as your personal credit history at hand. This includes how you obtain the necessary finances for your company and how you run things there. Requesting a credit report for your business beforehand will also be a good move.
Most importantly, be sure you have maintained a favourable business and personal credit score for lenders to consider you faster. Pay your dues on time and avoid mounting up huge debts.
In your small business, establishing a merchant account may seem unnecessary or too much of a hassle at first; however, once you start accepting credit payments, you will surely realize how much it can contribute to improving your company.
It does not only by boosting sales, but it can also provide more convenience to your customers and even establish your company. More importantly, accepting credit card payments will improve cash flow.
Ultimately, once you see how your small business can grow with a certified merchant status, you will realize your efforts were worth it.
However, one must find a way to accept credit card payments in an instant. One has to apply to many banks for merchant status to be able to do this. But once your merchant status is established, your business will be ready.
How Does Merchant Status Work?
Your company must first partner with one or a few banks to be able to accept credit payments. Before doing so, you must apply to these banks to achieve merchant status. These banks will work with you to transfer the money paid through credit by customers within a day or two of the sale.
They will also be responsible for collecting the money from the customer. In return, your company will pay them a usual commission, ranging from 1.5 to 5 per cent for each transaction. Other fees may include monthly support and equipment rentals.
What Do Banks Look For In Companies Applying For Merchant Status?
Applying for merchant status may be similar to applying for a loan, as lenders would certainly investigate your overall financial status. The feasibility of using credit payments through your business will certainly be considered. Here are some factors that lenders will need to consider before granting you merchant status:
Your Business’ Type & Length of Time.
Lenders need to know whether granting your company the status might have higher risks for accepting credit payments. For example, home-based companies may need help to obtain merchant status than companies with stores. Aside from this, companies already established for some time, in contrast to those only starting, may be granted status quicker.
Your Sales Track Record.
Lenders would also be interested to know if your company could bring money to the table. If your company has a dependable sales track record, then the easier for you to achieve status.
Your Credit History.
General creditworthiness is given much consideration. Be prepared for your personal or business credit histories to be investigated. In line with this, lenders may also try to check with your previous merchant accounts about your business’s performance, as this gives feedback on how creditworthy you are.
What Should You Do To Achieve Merchant Status?
To prepare your company for application, you must be ready to have all information about your business as well as your personal credit history at hand. This includes how you obtain the necessary finances for your company and how you run things there. Requesting a credit report for your business beforehand will also be a good move.
Most importantly, be sure you have maintained a favourable business and personal credit score for lenders to consider you faster. Pay your dues on time and avoid mounting up huge debts.
In your small business, establishing a merchant account may seem unnecessary or too much of a hassle at first; however, once you start accepting credit payments, you will surely realize how much it can contribute to improving your company.
It does not only by boosting sales, but it can also provide more convenience to your customers and even establish your company. More importantly, accepting credit card payments will improve cash flow.
Ultimately, once you see how your small business can grow with a certified merchant status, you will realize your efforts were worth it.