Are you a high-risk business owner looking for a banking partner that understands your unique needs and can support your long-term success? If so, you’re not alone. Many business owners in high-risk industries struggle to find a financial institution that will work with them, let alone provide the kind of support they need to grow and thrive. In this blog, we’ll share the ultimate checklist for selecting a banking partner that understands your high-risk business.
What Are ‘High-Risk’ Businesses?
Before we dive into the specifics of selecting a banking partner, let’s first define what we mean by “high-risk business.” High-risk businesses are companies or industries that are considered to be riskier than others due to factors such as their financial volatility, regulatory environment, or market competition. These businesses are often denied services by traditional banks and financial institutions because of the perceived risks associated with them.
- Adult entertainment websites
- Online gaming, gambling and sports betting
- CBD & Nutraceuticals
- Adult / fetish marketplaces and more
- Legal firearms
Some high-risk businesses are also considered “cash-heavy,” meaning they deal primarily in cash and have a higher risk of theft or fraud. This can make it difficult for them to find banking partners that are willing to work with them.
Understanding the Importance of Selecting the Right Banking Partner
While these businesses may face difficulties in accessing traditional banking services, there are alternative options available, including working with high-risk payment processors, fintech companies, or specialized banks. It’s essential for business owners to understand the unique challenges of their industry and to seek out financial services that are tailored to their needs.
As a high-risk business owner, selecting the right banking partner is crucial to your long-term success. Not only do you need a financial institution that will work with you, but you also need one that understands your unique needs and can provide the support you need to grow and thrive.
The right banking partner can help you manage your finances, mitigate risk, and streamline your operations. They can also provide access to business loans, and other resources that are critical to expand your business.
On the other hand, the wrong banking partner can hold you back and even put your business at risk.
Key Factors to Consider When Selecting a Banking Partner
When selecting a banking partner for your high-risk business, there are several factors to consider. These include:
First and foremost, you want a banking partner that is stable and secure. Look for a financial institution that has a strong track record of financial stability and growth. You don’t want to partner with a bank that is struggling financially or that may be at risk of failing.
Imagine you’re a small business owner in the cannabis industry. You partner with a bank that has a history of financial instability and is struggling to keep up with the changing regulatory environment. This would literally put your business funds at risk, as well as your ability to access financial services in the future.
In addition to stability, you want a banking partner that is committed to growth. Look for a bank that is investing in its own growth and that has a track record of helping its clients grow and succeed. You want a partner that is in it for the long haul and that will be there to support your business as it grows and evolves.
You should also look for a payment partner who can accommodate future expansion plans that you may have for your business and support new markets or business segments.
Your banking partner should also be committed to your long-term success. Look for a bank that takes the time to understand your business and its unique needs. They should be willing to work with you to develop customized solutions that meet your specific needs and goals.
Your banking partner should be able to help you manage your finances effectively. Look for a bank that offers advanced financial management tools and resources, such as online banking, mobile banking, and cash management services. They should also be able to provide guidance and support on issues such as cash flow management, budgeting, and forecasting.
As a high-risk business owner, risk management is crucial. Look for a banking partner that understands the unique risks associated with your industry and that can help you mitigate those risks. They should be able to provide guidance and support on issues such as fraud prevention, compliance, and regulatory requirements.
Your banking partner should be able to support your business operations effectively. Look for a bank that offers customized solutions for your industry, such as payroll processing, merchant services, and foreign currency exchange. They should also be able to provide support for issues such as account reconciliation and tax reporting.
Last but not least, customer service is crucial when it comes to selecting a banking partner. Look for a bank that is known for its outstanding customer service and that is committed to providing personalized support and guidance. You want a partner that is responsive, proactive, and that will go above and beyond to help you succeed.
Checklist for Selecting a Banking Partner for a High-Risk Business
Based on the factors we’ve just discussed, here is a checklist you can use when selecting a banking partner for your high-risk business:
- Stability: Is the bank financially stable and secure? One way to assess a bank’s stability is to check its credit ratings, which are assigned by independent rating agencies. A bank with a higher credit rating indicates a lower likelihood of default or financial distress.
- Growth: Is the bank investing in its own growth and committed to helping its clients grow and succeed? When evaluating a bank’s commitment to growth, look for signs of innovation and investment the bank makes in keeping up with paytech.
- Long-term success: Does the bank take the time to understand your business and its unique needs? To assess a bank’s commitment to your long-term success, look for signs of personalized service and attention. For instance, does the bank assign a dedicated relationship manager to your account who understands your business and is available to answer questions and provide guidance?
- Financial management: Does the bank offer advanced financial management tools and resources to help you manage your finances effectively? To assess a bank’s capabilities in financial management, look for the breadth and depth of its financial management tools and resources.
- Risk management: Does the bank understand the unique risks associated with your industry and can they help you mitigate those risks? To assess a bank’s capabilities in risk management, look for its expertise and experience in your industry.
- Business operations: Does the bank offer customized solutions for your industry to support your business operations effectively? To assess a financial institution’s capabilities in Business Operations, pay attention to offers that will come handy for account reconciliation and tax reporting and help your high-risk business stay on top of its regulatory obligations.
- Customer service: Is the bank known for its outstanding customer service and committed to providing personalized support and guidance? Look for a bank that offers a dedicated account manager or customer service representative who can provide personalized support and guidance. Ideally, this representative should have experience working with high-risk businesses and should be familiar with the unique challenges and risks associated with your industry.
Questions to Ask When Evaluating Potential Banking Partners
When evaluating potential banking partners, here are some questions you should ask:
- What experience do you have working with high-risk businesses in our industry?
- What financial management tools and resources do you offer?
- How do you help your clients manage risk and comply with regulatory requirements?
- Do you offer customized solutions for our industry?
- What is your approach to customer service and how do you ensure that our needs are met?
By asking these questions and carefully evaluating the responses, you can gain a better understanding of how each potential banking partner can support your high-risk business. This information can help you make an informed decision and choose a partner that aligns with your unique needs and goals.
Alternatives to Traditional Banking Options for High-Risk Businesses
If you’re having trouble finding a traditional banking partner that will work with your high-risk business, there are alternatives you can consider. These may include:
- Online banks: Some online banks specialize in working with high-risk businesses and may offer customized solutions to meet your needs.
- Payment Partners (or processors): Payment solution providers such as TickleCharge, or processors such as PayPal and SegPay can also provide all of the financial and risk management tools a high-risk business needs.
But TickleCharge as a payment processing solution stands out because it not only leverages its network of banks and processors to quickly secure a high risk merchant account but also provides a streamlined platform to reduce the complexities associated with high-risk payment processing.
TickleCharge also offers customizable payment processing solutions, fraud prevention tools, chargeback management, and compliance support.
With access to multiple payment gateways and acquiring banks, TickleCharge allows businesses to diversify their payment processing options and reduce the risk of payment disruptions. Additionally, TickleCharge offers transparent pricing with no hidden fees, providing businesses with peace of mind and the ability to budget more effectively.
- Credit unions: Some credit unions may be more willing to work with high-risk businesses than traditional banks.
Why Selecting the Right Banking Partner is Crucial for Your High-Risk Business’s Success
In conclusion, selecting the right banking partner is crucial for the success of your high-risk business. You need a partner that understands your unique needs and can provide the support you need to grow and thrive. By considering factors such as stability, growth, long-term success, financial management, risk management, business operations, and customer service, you can find the right banking partner to help you achieve your goals.
So, take the time to evaluate potential banking partners carefully and don’t be afraid to ask questions. With the right banking partner by your side, you can overcome the challenges of operating a high-risk business and achieve long-term success.
If you’re a high-risk business owner looking for a banking partner that understands your unique needs, we’re here to help. Contact us today to learn more about our customized solutions for high-risk businesses.