1. Gather Your Financial StatementsFinancial statements are the single best tool you can bring to the table in order to leverage the best terms of approval possible.
From time to time I work with clients that do not want to provide financial statements. It’s usually because they are a mid-sized company that is privately owned and they value that privacy. Company financials are sensitive business information. However, from a payment processing perspective this is a significant mistake. More than anything else, most underwriters will want to see financial stability demonstrated so that they know the company will continue successfully operating well into the future.
On the flip side of this coin I work with startups that don’t have solid a financial history. Being a startup is tough and being in that situation (especially if you have a risky product) makes it hard to get approval. The underwriter knows that if a pile of chargebacks come in the merchant may have difficulty returning the funds to the cardholders. Merchants in a startup position would give anything to have a strong balance sheet because it would make a huge difference in their approval. If a business has worked hard to earn success, it's a poor decision not to leverage this successful history to get the best possible terms of approval. Use your financial statements or be prepared to put up a security reserve. You will want to provide the most recent balance sheet, profit and loss statement, and any notes from the accountant.
A note on startups: if you have not yet completed a year end don't fret. If trading volumes are smaller, then approval should be relatively easy to achieve (less money trading through the account means less potential risk). If you operate a startup business that is likely to do strong trading volume out of the gate you will have to leverage the other tips found below to achieve approval. It may also be helpful to work with a processor or agent that specializes in consulting with startups to help through the approval process. Some processors are more startup friendly than others.
2. Consider Your Processing HistoryHaving a strong processing history is another extremely important tool to leverage your application. The more money you trade, and the fewer chargebacks, the stronger case you build. The logic is simple: if you've processed credit cards previously and been successful then why would that change? It wouldn’t. Always supply at least 3 months processing statements whenever available. 6 months is going the extra distance. If you trade high volumes or have a high risk product or service dig up an entire years worth of statements. It may be a bit of extra work but it will be well worth the effort if it reduces or eliminates the need for a security reserve.
Processing statements should always show the following broken down by month:
- Number of transactions
- Total transaction volume
- Number of refunds
- Total refund volume
- Number of chargebacks
- Total chargeback volume