Your thoughts on signing a Personal Guarantee when getting a merchant account?
 

Did you sign one? Or did you find an alternative? Are they a necessity? Have you ever been burned by one?

YARGH! I have something like 15 merchant accounts, and never had to sign one. Is this a new thing?

EDIT: Oh yeah.... BUMP for a business thread.

thanks for the bump chio!

Philip

I'm in the business of setting merchant accounts up for people and business'
I'd question the reason the bank asks for it

we can talk via icq, email or phone if you want some answers

It's usually required. If you have a merchant account without a personal guarantee, I'd be surprised.

The point is to prevent fraud. Credit card money is normally wired into your merchant account (business bank account) within 48 hours. However, it takes far longer for the banks to collect the money from the card holder. Consumer credit card statements usually go out monthly, and consumers take time to report any improper charges.

Hence, there is an opportunity for fraud where an unscrupulous merchant could ring up alot of phony charges, collect the funds in a day or two, and then head south, leaving the banks with the headache. If the only offset is a drained or non-existent corporate bank account, and the only guarantor is a worthless or defunct corporation.. I think you can see the point.

If you aren't going to commit fraud, there are few risks. Definitely talk with your lawyer though.

At least this is how is used to work.

Many US banks have a standard clause in their contracts that are personal guarantees .. it all depends on the individual bank
a lot of the offshore banks do not have this

hey phillip give me a call asap 714 717 5813 we should talk