When you’re trying to get a small business off the ground, it can start to seem like everything is working against you. That can be a dispiriting feeling even at the best of times. But when you’re in the early days of your business, you need all the help you can get! It often feels like there are way too many barriers to climb over and hoops to jump through. Isn’t the world supposed to be helping small businesses, not hindering them?
If you find that you’re having a lot of trouble getting things off the ground, then you need to find out why. What many business owners find to be the case is that people have determined their business to be high risk. There are many reasons people may see your business as high risk. Below, we will go through the top three problems that come with the assumption that you are “high risk”.
Obtaining a loan for your business
There are very few businesses out there that were started without the help of a business loan. Sure, some people have managed to accumulate the required capital. (Or, more likely, inherited it.) But for the rest of us, it was a case of going to a creditor and getting them to lend us some money. Whether or not you can get a loan for your business hinges on the credit scores. If you’re starting out, it will likely depend on your personal profile. If your business is already established, then the business profile will be assessed.
If you or your business has been labeled as high risk by the credit report, you may not get the loan you need. They have judged, for whatever reasons, that you were unlikely to be able to pay back the loan. However, you must remember that credit scores aren’t universal. Other creditors may have different opinions. Some will help you even if you don’t have a great score.
Setting up a merchant account
A merchant account is essential for a business that takes payment from customers. If you’ve been evaluated as high risk during your application, however, you may be turned down.
Generally, being labeled as high risk here means one of two things. It often means that the company doesn’t believe you’re making the profits to justify them working with you. It can also mean that your line of work sees a lot of chargeback from customers. Your dream isn’t hopeless, however! You can apply for a high risk merchant account if you still want to proceed.
Getting the sales you need
If a user believes you’re high risk, then you need to take measures immediately. What this generally means is that your business doesn’t look very secure. If you’re online, for example, you may not have the right security certificates.
When a customer gives you their payment information, they’re taking a risk. More people than you may think avoid shopping on websites that aren’t called Amazon or eBay. They simply don’t trust other online stores! You need to make sure your website eases all worries by following the correct security procedures. You should also make sure your website clearly displays information and you and your business.