Question :
Kia ora.  My cousin and I will launching an inspirational streetwear line in October – aim is for Labour Weekend.  This week I learnt that to become a merchant all directors and stakeholders who own 25% or more are subject to a credit check.  Now my personal finances are the best they’ve ever been in my life however, due to past financial literacy, I have defaults.  My cousin and I are the only directors/stakeholders and own 50% each.What advice can be given?  Is there another option that allows me to keep 50% and for our business to become a merchant?  And if not, what advice and options are best for me?  

Question submitted 23/08/20 @ 06:48am
Industry: Funding & Finance
  • Morena Ngawai _ I am sure we can get you some insights today around how to deal with this issue. Let me ask a couple of the experts to give some guidance, Andy

    Morena Ngawai – a couple experts shot me some thoughts – you could go to Payment Express or Smartpay – both options might work for you – happy to do some intro’s offline if you want – @manaaki.io">andy.hamilton@manaaki.io

    Ngawai – I asked a payment expert for some thoughts/guidance –
    “A common question. It comes down to the acquirer’s risk position and realistically each acquirer sets the benchmarks for this individually. Some options are:
    • Leverage main bank relationship by meeting with the bank Relationship Manager and talking through options that will satisfy the bank’s risk criteria e.g. if the customer holds a mortgage with the bank leverage this to support the approval of a merchant facility
    • Initiate a merchant facility through an independent aggregator who tend to have lesser risk requirements to support merchant facility approval. Examples include: Stripe, Paypal, Ezidebit, Flo2Cash etc. Really depends on the needs i.e. online vis physical store/EFTPOS terminal. Often an aggregator is a great option for a new merchant having issues establishing a merchant facility, at least until they can establish a proven trading history that supports a mainstream provider’s risk approval (obviously also ensure all previous defaults are paid in full).
    • Consider Alternative Payment options: Online EFTPOS (Paymark), Poli, Account to Account (Windcave), Afterpay, Zip, Laybuy
    • Bank transfers – not ideal, but will get things started”

    Another suggestion is Stripe – Ngawai. Nga Mihi

    And one more – are the ‘defaults’ still owing and/or have they been resolved?

    Following on from Andy’s question above, an easy (and free) way to check this is to create an account with Credit Simple https://www.creditsimple.co.nz/ and then you’ll be able to see if your defaults are paid etc. If they are unpaid I recommend paying them off if you’re able to. People don’t tend to expect a ‘prefect’ credit score but setting it up as best as it can be is good- and paying off the defaults (or disputing them if you don’t agree with them) is a worthwhile step.
    Bes of luck!

    Kia ora Ngawai,

    From a banker point of view, if it was a small default and had been previously dealt with, this should not have any impact on your credit rating. If you have further question, feel free to connect with myself via frankywang83@gmail.com

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