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I Am a High Risk Merchant, What Are My Loan Options

Startups and high risk companies have a hard time getting financial backing for their businesses. Lenders view startups and businesses that operate within high risk markets as undesirable and unnecessarily risky. Still there are some funding options for new entrepreneurs and high risk business owners. Personal loans, some types of business loans and alternative lending programs are more readily available to organizations that can’t qualify for bank loans.

Personal Loans

How will you be assessed by personal loan lenders? Lenders will look into your personal credit score, sources of income, debt-to-income ratio, credit history, and loan usage. Remember: the better your creditworthiness, the better your rates will be. Applicants must have a credit score of at least 640. If your score is less, you may get a loan but don’t expect great rates. If you are looking for a huge loan, personal lending may not be the avenue for you. Personal lenders won’t be offering huge loans. The average loan amount ranges between $35K and $50K.

Business Loans

If you are applying for a business loan, lenders will look at your business credit score and how well the business is doing thus far. In addition to the business credit score, they’ll look at things like collateral, revenue, net income, debt-to-asset ratio. Business loans can reach up to $1M and beyond. If you do qualify for a business loan, putting up collateral can lower interest rates. In addition to collateral, lenders may also accept personal guarantees or UCC-1 blanket liens. Although it may be easier to qualify for business loans with personal guarantees or UCC-1 blanket liens, business owners may face harsh penalties if they are unable to pay off loans.

Merchant Cash Advances

Merchant cash advances are another option for high risk merchants. With advances, lenders give merchants an advance against future credit card sales. Lenders will get funding due to a merchant’s future credit card transactions (the holdback) for a specified term. In addition, merchant cash advances offer no fixed monthly payments, flexible cash flow system that allows merchants to pay less when business is slow, and advances can be used for any type of business expense.

First American Merchant offers business cash advances to high risk merchants. FAM offers simple, flexible loan programs that will give your business critical funds in less than 72 hours. Applicants won’t need to supply tax returns or financials. Get the money your business desperately needs. Contact us now to start your application.