So your merchant account application got declined? Don’t worry, it happens to the best of us!

Getting a decline is frustrating, but don’t take it personally there’s ways around it. Merchant account providers have an element of risk that all providers are trying to avoid so every deal is underwritten based on a number of elements that determine risk.

So with that it in mind, there are ways to improve your approach and raise the likelihood of getting accepted.

Applications are declined for many reasons including being categorized as a high-risk merchant due to the products you sell or the fact that your business is a startup. A history of chargebacks, poor credit history, or having filed for bankruptcy can stop you at the gate as well.

So these areas of concern may help you to get your merchant account approved next time.


1. White lies have consequences

You’ve gotta be honest about all the information required of you from the start, even if some of that information isn’t so favorable. Things that might concern you about your merchant history might not be so severe in the eyes of the application reviewers, but what does concern the application reviewers are details that you’ve intentionally let slide.

One of the main reasons merchants get denied applications is because they weren’t completely truthful about their business practices, products and prices, or credit history.

For any decent merchant account provider who cares about their business, reviewers will do thorough background checks on you and they will find out about any information you may have omitted or lied about. Just like any other aspect of life, being direct and honest will help you out immensely.

Also, make sure you ask why you were declined so that you can fix things up on your end for the next application. Every little bit of information that you get helps you for the next try.


2. Are you a little behind on your accounts payable?

If a previous merchant account still has outstanding payments to be made, this won’t look good for you. It’s the equivalent of asking to rent a new house while still owing rent on the previous house. People are going to find out about it and it’ll affect your application.

Underwriting will look into all aspects of your previous business practices, and outstanding bills will be detrimental to your progress. Make sure you go settle all old merchant account bills before submitting your next application, and retail proof of the final bill.


3. In credit there’s no way to hide your past!

Let’s say, aside from your own business, you personally have bad credit history. As the individual filling out the application and representing your business, this will raise a red flag for underwriting.

A way around this could be to have another key member of your team who does have good personal credit history fill out the application, specifically a co-owner, or other significant figure. As long as they own part of your company, they’re eligible to represent it and apply.


4. So where’s an expert when you need one?

With the vast amount of merchant account providers that exist, it can be a bit overwhelming to try to find a good fit for your business, particularly if you’re a startup company and don’t have much experience. Your application may simply have been denied because you went with a provider that prefers to handle other kinds of companies.

This is where a good merchant broker could help you greatly. When they find a good fit for you you’re likely to get approved quickly and you’ll have any number of added benefits that this new provider may have to offer.

Especially if you don’t have much experience in this field yet, going with a merchant broker could be a wise choice. They’ll help you determine the reasons why your first application was declined, and will better prepare you to submit a new one.


5. Are you stuffing a square peg into a round hole?

Sometimes it really isn’t you. Sometimes it’s the merchant account provider that’s the issue.

The problem might not be your business or the products you sell, but rather the types of businesses that your selected provider prefers to handle. Some providers don’t want to deal with certain businesses or small startups because they’re high-risk. The hard part of this is that some won’t tell you up front.

Before submitting a new application, ask a couple of questions around requirements for approving new merchant accounts. If you find a provider that either specializes in or simply accepts startup and high-risk businesses, your chances of being approved by them will be high.

Just because you’ve heard good things about a specific provider doesn’t mean they’re the right fit for your business. Make sure you research their policies and requirements thoroughly before applying, and if you know you meet their criteria, then you’ve likely found a good candidate.


It’s time to advance the runner

The bottom line is that having your application get denied can often times be an opportunity to find options that are even better suited for your business than the ones you were previously considering.

So pick up your bat, dust yourself off, rethink your strategy, and try again with a new perspective. Or even better? Give us a call.. it’s so much simpler.

Get in touch

1075 Broad Ripple Ave
Suite 340
Indianapolis, IN 46220