How to Tackle Challenges When Running A High Risk Business

December 26, 2018 | Financial Problems | Jessyka Lee

Running any business is not easy, but it can be particularly challenging if you’re a high risk retailer. Not only will traditional funding from conventional sources, such as banks and investors be near-impossible to find, but payment processing companies and insurance companies are also reluctant to provide you their services.

In addition to these difficulties, you’ll be required to adhere to strict compliance requirements determined by the state and federal governments, as well as to other regulatory bodies, and failure to so could affect you dearly.

And, as if that’s not already enough, the fact that your business got tagged with needing a high risk merchant account in the first place, automatically presumes that you have a high rate of chargebacks, bad credit, or poor history with previous financiers.

So, what can you do to make sure your business stays afloat when you’ve got these challenges weighing you down? Well, here are a couple reasonable pointers.

Pick an Ideal Business Structure

Though all business models include their ups and downs, choosing one that reduces your liability, like a company limited liability company (LLC), or limited liability partnership (LLP) can operate better if you run a high risk business. High risk merchant account entrepreneurs frequently avoid sole proprietorship, as that would render them open to personal liability for any losses, debts, or lawsuits the company incurs.

High Risk Financiers

Getting financed by conventional financial institutions will rarely be an option if you’re a high risk merchant. If your business requires an influx of funds up front, you shouldn’t even waste your time with traditional banks. Rather, look at applying with lenders and payment processors who specialize in high risk merchant accounts and are experienced with managing high risk businesses. High risk merchant accounts, loans, and cash advances may be an excellent source of funding if you find the right payment processor, like PayKings.

High Risk Merchant Accounts

Any insecure business that wants to accept cashless payments from the clients will need to register for a high risk merchant account and credit card processing from a respectable provider. Companies that specialize in high risk enterprises will be more likely to approve your business plan than traditional payment processors, like banks. Moreover, due to their experience in servicing your kind of business, they will be a great deal more equipped to cater to your specific requirements and issues.

An Excellent Insurance Strategy

If your business is involved with high risk activities, it is vital that you register for insurance policy coverage. Insurance will protect you from liability in the case of an accident or lawsuit. Most insurance companies charge a higher premium than normal for high risk merchants, and a few even exclude certain industries. Therefore, do some research to find out the companies that can provide coverage to your type of business, and whose prices make sense for you.

Legal Aid

As a high risk merchant, you will most likely have too much on your plate to manage lawsuits, chargeback disputes, and regulatory transgressions. A good lawyer will give you proper advice on how best to comply with all laws and regulations, and can help you cope with any legal problems that might appear in the future; they can also assist you in instances where aggregate payment processors might shut down your high risk merchant account and hold or freeze your funds.

It might be tough to succeed as a high risk merchant, but following the tips giving above will set you on the right course and lead your high risk merchant account along down the road toward financial success.

 

December 26, 2018 | Financial Problems | Jessyka Lee

Leave a Reply

Your email address will not be published. Required fields are marked *