khime Posted July 24, 2006 Posted July 24, 2006 Hi I've been trading for 2 years now as a UK limited company with HSBC and I use their merchant card secure epayments facility to accept credit cards. Today, I get a phone call from them as my turnover has increased over the two years they say that we are an "increased risk" and now they want me to personally guarantee ?30,000 against the business. Not only that they want to charge me ?80 for this thing that I didnt ask for in addition to the solicitors fees to read through the PG! Seems really unfair and completely money grabbing of them to ask for ?80 to process this considering HSBC makes record profits each year. If I dont sign this personal guarantee agreement then they say that they will reduce our business credit card limit and "review our card processing facilities" whatever that means. I asked them is this common and the guy said that all company directors do this (which made me scratch my chin) So I'm asking does anybody out there have a personal guarantee on their business and what experiences they have with this Thanks
rommany Posted July 24, 2006 Posted July 24, 2006 Hi I am also with HSBC for one year, but i have not heard of this before. What turnover are we talking about, my turnover is around 20K this year and predicted 35-40k next, so im not sure what figure they start to ask for a gurantee? i agree with the amount of profits they make you would think they would not bother. Regards
radders Posted July 24, 2006 Posted July 24, 2006 Sounds very odd. At Worldpay they would be offering you a cheaper rate for the increased volume.
Guest Posted July 24, 2006 Posted July 24, 2006 I can think of what I would tell them, but I can not write that here. :-" Personal guantees are normal for a new business but after a few years I would not give it.
khime Posted July 25, 2006 Author Posted July 25, 2006 Thing is, on the card processing agreement there was no warning that if our turnover went over a certain amount then they would ask for a personal guarantee. Currently processing at least ?30k a month on HSBC epayments. I am really going to reconsider using HSBC for card processing the money grabbing C***TS!. >_< . I just dont understand how they come up with the risk factor of ?30k and then charging me ?80 for this. Also we dont have any loans with them and have never missed a payment with anything. What is the rate on worldpay at the moment and how easily intergrated to oscommerce is it? I have been advised by a friend who owns a retail shop that his rate is only around 1.8% which is better than the 2.35% that I'm currently on but thats overseas. Are there any other merchant accounts worth considering.?
MarcoZorro Posted July 25, 2006 Posted July 25, 2006 From my experience its not unheard of when the bank considers the business at a high risk of online fraud, I have known people that had to put 100k down as a garuantee to keep their online credit card facility. The problem with worldpay is 1. The fee's 2. They sit on your money for 30 days You could take a look at protx but you are likely to be in the same position there.
mpiscopo Posted July 25, 2006 Posted July 25, 2006 The retail shop rate is always lower than the online rate because there is less risk (retail shops physically swipe a card rather than accept a number over the Internet). The 2.35% is pretty much the going rate for online transactions. I agree with the other posters, don't do a personal guarantee. Shop around. I'm surprised they are looking for a personal guarantee, especially since they are making much more money from you now. Is there anything which has happened to cause them to think your busines might be a risk (customers disputing charges, returns, etc)?
khime Posted July 26, 2006 Author Posted July 26, 2006 We've had no problems with any customers at all. If any customers return anything we always issue refunds. What my accountant has said (who used to be a bank manager) is that the banks want to cover themselves in case we take ?30k worth of money off customers and do a runner. So it seems that we will have to do this. What I dont agree is that we need to pay the ?80 bank charges for it though. Easy money for HSBC
MarcoZorro Posted July 26, 2006 Posted July 26, 2006 What I dont agree is that we need to pay the ?80 bank charges for it though. Easy money for HSBC The banks where I am are pretty flexible with their fee's... If you make an appointment with your bank manager I am sure you can convince him to waive the fee.
c_karsan Posted August 12, 2006 Posted August 12, 2006 i went here its called securehosting i switched from worldpay. you will need a merchant account though i use streamline. i bought a bulk of credits in advance so cheaper than worldpays extortionate charges and i get my money in two-three days. The sooner you fall behind, the more time you'll have to catch up.
matbennett Posted August 14, 2006 Posted August 14, 2006 The problem with worldpay is 1. The fee's 2. They sit on your money for 30 days Both of these are highly negotiable. With the sort of turnover quoted above neither of the above issues should really be a problem. Worldpay fees are high when you use then as a bureau account. If you have a merchant account they are immediately more competetive. Their quoted prices also drop based on turnover. Several clients I have also receive funds from worldpay in 7 days or less.
Tremblehorne Posted August 14, 2006 Posted August 14, 2006 Both of these are highly negotiable. With the sort of turnover quoted above neither of the above issues should really be a problem. Worldpay fees are high when you use then as a bureau account. If you have a merchant account they are immediately more competetive. Their quoted prices also drop based on turnover. Several clients I have also receive funds from worldpay in 7 days or less. I had a similiar affair with HSBC, or at least the request. Its an indemnity against the debt. As a limited company they are taking big risks. If your business went belly up they wouldn't get much out of you to recover the lolly. So they ask you and any partners to cover the liability. They wanted ?8k from me. I didn't think it was worth it to be honest. The ?80 is the fee for making that legal. As for the costs to increased trade I would guess the charges reduce the more you take. Tho I am sure someone will put me right on that! Regards Steve
khime Posted August 15, 2006 Author Posted August 15, 2006 I had a similiar affair with HSBC, or at least the request. Its an indemnity against the debt. As a limited company they are taking big risks. If your business went belly up they wouldn't get much out of you to recover the lolly. So they ask you and any partners to cover the liability. They wanted ?8k from me. I didn't think it was worth it to be honest. The ?80 is the fee for making that legal. As for the costs to increased trade I would guess the charges reduce the more you take. Tho I am sure someone will put me right on that! So when I asked them what would happen if I refuse to sign this agreement they said that they will "review" our business credit card and eprocessing services which I assume they would take it away from us. You said it wasnt worth it so in the end did you refuse it and what happened when you refused to sign the personal guarantee? For the rate when we signed up it was 2.75% but after increasing trade they reduced to 2.35% which helps. Anybody got a better rate than that?
jon_l Posted August 16, 2006 Posted August 16, 2006 I've got a better rate than that from HSBC, though I have been with them for a long time. They calculate the rate using a number of factors - the type of products (some are likely to attract more fraud), charge back levels, the balance of UK vs ROW issued cards as well as the turnover. The request for a guarantee isn't that unusual, its because its a limited company. If the business folds they lose their money as they can't go after you or anyone else for the money - they don't want to take that risk. If you didn't trade as a limited company they wouldn't need the guarantee. I'd ask them if they'd reduce the processing charges if you give them the guarantee. Even if they only dropped by 0.1% you'd more than make up for the ?80 charge. I'd of thought they'd come down a bit as it removes some of the risks for them. They'd only use the guarantee if things hit the fan big time, as a last resort. They won't demand money from you if the business account goes overdrawn for example. They would use it if the business folded and it owed them (and them only) money. HSBC pay the money out pretty quickly as well, which a lot of processors don't do.
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