[Weekly Kick] What is a personal guarantee?

Video Transcript:

When you apply for a merchant account, the credit card processor, and we’ll probably ask you to sign a personal guarantee, the reason why they want that is in case there’s a charge back, so customer disputes the transaction and then your business doesn’t have enough money to pay for the charge back or has gotten up a business.

They want to know that there’s person with credit who will make good on that, on that liability, so that’s why they bought it. As a business owner, you can totally get a merchant account, without a personal guarantee. It’s just a lot more paperwork, so to get underway with a personal guarantee usually takes just a day. They’ll need like your driver’s license that you’ll need to fill out the contract to do it with our personal guarantee.

To do it without a personal guarantee, they’ll actually evaluate the credit of your business, so you’ll need to supply them with things like bank statements, tax returns, financial statements, and it’s just a little bit more of a hassle, but totally doable.