Accepting Credit Cards 

How to Get a Merchant Account for Your Business

Do you know that nearly 33% of consumer purchases are not paid in cash? A lot of people nowadays, prefer the convenience of purchasing through using their credit cards or ATM card with the credit card logo. No matter what type of business you run, whether it is a brick and mortar shop, online or mail order business, offering credit cards as a form of payment will help your business grow. I think you'll agree that it is imperative for small business owners to apply for a merchant account so they can accept credit cards from their clients.

However, if you haven't applied for a merchant account before, you may find the process a little overwhelming. But keep in mind once your account is established, you'll be able to reach a much larger audience to sell your product too. We compiled a few questions to help you learn more about merchant accounts.

How Do Merchant Accounts Work?

Merchant accounts work buy giving your business the capability to accept major credit cards as payment for your businesses goods or services. You (as a business owner) must apply to these banks to get accepted for a merchant account. The merchant account has a gateway service that transfers the money between the credit card company to your bank account with a day or two of the sale. Your company will pay fees ranging from 1.5 percent to 5 percent for each transaction and other fees for using the service or renting equipment.

What Do Banks Look For In Companies that Apply For Merchant Account?

When I applied for a merchant account I found it similar to applying for a loan. This is because lenders would investigate on your business' overall financial status. Here are some factors that lenders will need to consider before approving your application:

1. What Your Business Offers and How Long You Have Been In Business

They would certainly look into the risks if they allowed your business to accept credit cards. For example, home-based businesses may have more difficulty to obtain a merchant status as compared to companies with stores. Aside from this, companies that are already established for some time in contrast to those that are only starting out may be granted status quicker.

2. Your Company's Revenue History

Lenders would also be interested to know if your company could really bring in money to the table. If your company has a dependable sales track record, then the easier for you to achieve status.

3. Your Personal and Business Credit History

Your credit history will definitely be looked into. Be prepared for your personal and business credit histories to be reviewed. Also, if you had merchant accounts in the past, that becomes subject for review as well. Then of course they'll look into any credit history that your business has.

What Can I Do To Help By Business Get Approval Merchant Account?

For the application process, have all information about your business as and personal credit history at hand. Include how your company makes money and how your company conducts business. You may want to get a credit report for your business before hand so you can explain any surprises.

Most importantly, be sure that you have a favorable business and personal credit score for hopefully a faster consideration. Pay your bills on time and avoid building large debt for your business and personal life.

Once you start accepting credit payments in your business, you will surely realize how much it can contribute to improving your company. It can by boost sales and revenue and it also provides much more convenience to your customers. More importantly, accepting credit card payments will surely improve cash flow.