Legal Question in Business Law in California

merchant bank account

My bank wants a letter from me explaining why my merchant account is so low (BALANCE). I've been with them for 4 years and this is the first year that they requested a letter which if approved will allow me to continue banking there. each year they run a credit check and this year my report was below there their standards. I have a restaurant and two donut shops and most recently bought a bar and grill. in feb o8 i recieved a full liquor license. i'm adding up all major expenses i had last year, i.e. equipment replacement cost, remodling bar expense, shelving and stocking liquor, lease for new business, new flooring in donut shop walkin, including coving throughout which was a mandatory repair and vilotion from health dept. Inaddition the resising food cost. is there any reference books or articles and or tips you can give me with the writing of this letter. i must email it to the bank for tomorrow am thank you


Asked on 7/01/08, 10:21 pm

1 Answer from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: merchant bank account

Tomorrow MORNING? That's pretty short notice. I think for one thing you need to work on an assumption that this bank is likely to drop you, and start looking for another. The fact that they want to communicate by e-mail is a tipoff that this isn't a local bank. In your area (I assume from your Zip Code it's Magalia, CA) there is at least one local bank (Butte County Bank) and down in Paradise if they haven't burned up, there's half a dozen more. Or go to Chico if necessary.

Your balances should be of no concern to a merchant account service provider. At most, they might be concerned about your credit rating and overall stability. Credit-card servicers are there to earn fees from your transactions, not to benefit from your deposits. Servicing credit cards is profitable.

Find a bank that loves you, wants your business to prosper, and where you and the bank president can play golf and go to Rotary together. Tell the nasty ones to go stuff it. That's the way small-town business prospers. Good luck!

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Answered on 7/02/08, 12:26 am


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