The essence of a business revolves around providing a product or service, which people then pay for. Different businesses have different offerings. However, this essence remains the same. Yet, at times, some businesses are considered more or less risky than others. This raises three major questions – what exactly is a risky business? And based on this definition, is your business risky? If yes, what can you do?
Starting with the first question, a business is considered risky when it operates in a volatile environment, or deals in products or services that have volatile and unstable demand. The difference between selling cars and selling newly approved drugs is an example of the difference between a safe and risky business. The former is free from any form of controversy, while also having a stable market. The same could, however, not be said about the latter.
At times, firms in the same industry can have varying levels of risk. A firm that uses loans to finance rapid growth is likely to be in bed with a lot more risk than one that is playing safe by issuing shares and being content with slow, yet sustainable, growth. Another measure firms resort to is hedging, whereby an offsetting position is taken in the market to counteract any unfavorable change in the business environment. So, to claim that your business is or isn’t risky just because it operates in a certain environment is not correct.
In most instances, keeping a check on the cash flow situation of the business and making sure all laws and regulations are abided is enough to keeping risk at bay. However, at times, these technical details that risk management experts use to gauge risk are reduced to being noise and what matters is what the banks and merchant account providers think of your business. High level of chargebacks, cancellation of transactions, credit card fraud, bad credit ratings, and no credit history are some of the factors that may present your business as high risk to a bank or merchant account provider. This high risk translates into lack of willingness to do business with you, leading to rejections on your merchant account applications.
Yet, there is a way out. This answers the last question – what can you do? There is no denying the importance a merchant account holds for a business, and so when one door is shut, you must look for another one. One such door you should consider is eMerchantBroker. Specializing in providing high risk merchant accounts to merchants who are denied by banks and other merchant account providers, EMB has a reputation of understanding your business, accepting risk as a part of every business, and allowing you to get immediate access to payment processing services.
So what is a high risk merchant account? It is a personalized merchant account, which in most ways is like your everyday merchant account, but aimed towards those who can’t get access to merchant accounts elsewhere. Consequently, while the terms may be slightly less favorable, these high risk merchant accounts that EMB brings to you are true saviors in time of need.
Perhaps your business is not risky. Perhaps your business is risky after all. When it comes to getting a merchant account, it is what the provider thinks that matters. If you are being denied a merchant account because of the apparent high risk, you know EMB is the way to go.