Are you thinking about selling your portfolio? It’s a significant decision. Whether you’re preparing to retire, handle an emergency, or reinvest, finding a trustworthy merchant services portfolio buyer is vital.
With so many potential credit card processing account buyers, how do you determine which suits your needs while making the wisest possible financial decision? Velocity Funding is here to guide you.
First, we’ll quickly cover why agents and Independent Sales Organizations (ISOs) sell to merchant services portfolio buyers. Then, you’ll learn how to find the right buyer before any payment processing residual stream purchase happens.
Why Do People Sell Their Portfolios?
There are infinite reasons why ISOs and agents decide to sell their respective portfolios. Some involve personal reasons. Other sellers make this decision based on business-related concerns. Here are some of the most common reasons agents and ISOs decide to sell:
- Retiring or Exiting the Industry: If you want or need to stop being a portfolio manager, selling it to a credit card processing account buyer lets you begin the next chapter of your life smoothly.
- Freeing Up Cash Quickly: Selling gives you immediate liquidity, which can be used to pay for an emergency or splurge on a gift for yourself.
- Unhappy with Current Processor: No one likes frustrating business relationships. If your processor isn’t holding up their end, selling your accounts can let you sever problematic ties.
- Reinvesting: Investing requires capital. If you’re short on funds, selling a partial or complete portfolio can provide access to fast cash.
- Scaling Down Operations: You may also want to stay in the portfolio management industry while doing this on a smaller scale. If so, selling some of your accounts makes that possible.
What to Consider Before Choosing a Merchant Services Portfolio Buyer
Choosing the ideal buyer is essential for ensuring a smooth and profitable sale. Evaluate these critical factors before signing any agreements.
Experience
It is crucial that an experienced buyer value or purchase your portfolio. Every business must start somewhere, but you don’t want to risk entrusting your portfolio and its worth to an inexperienced buyer.
Thankfully, there are ways you can vet a potential merchant services portfolio buyer’s reputation. Things to look for while researching a buyer include:
- A history of positive reviews
- The number of portfolios purchased
- Customer or business testimonials
- References
An experienced buyer helps instill confidence that a seller can enjoy a fair and seamless selling process.
Their Offer and Terms
Finding and working with a reliable buyer is a stellar way to start selling your portfolio. What’s just as vital is receiving a fair offer for your credit card processing accounts. By thoroughly reading the buyer’s agreement, you can avoid making mistakes, such as accepting a lowball offer or unfair terms from a merchant services portfolio buyer.
Are you worried you might miss something? Consider having a legal or financial professional review a proposed agreement’s terms. It’s better to pay for a professional’s help than to leave money on the table.
Follow these tips to ensure you get the best deal:
- Ask and understand a buyer’s valuation methods
- Compare offers from more than one buyer
- Watch out for agreement-related red flags, including restrictive terms or hidden fees
- Most purchase offers from ISOs require the Seller to continue to board new accounts to get paid. A great offer is not great if you have to continue to add accounts to the sellers portfolio.
- Other Portfolio Purchasers want to take full control over your merchants. Your merchants are your best source of future referrals and business. You don’t want a Portfolio Buyer to interfere with that relationship.
Post-Sale Support
A portfolio results from months, years, or decades spent building and maintaining business relationships. Because of this, finding a buyer who prioritizes ongoing merchant satisfaction is a crucial component of any sale. The right buyer does its part to minimize merchant-side disruptions.
A buyer such as Velocity Funding will never attempt to convert your merchants. We do not notify the Merchant that we are servicing the account and will only get involved if a problem arises that the processor cannot solve. We want the merchant account to remain with the same processor forever. Our approach is to have minimal contact with merchants but give maximum service when needed. You will be encouraged to keep your relationships for new referrals on different merchant service accounts.
Potential questions to ask a merchant services portfolio buyer at this point may include:
- How can you ensure a smooth transition?
- Will ongoing support be available for merchants?
- How will you communicate with merchants?
Velocity Funding prioritizes smooth transitions for merchants and sellers, ensuring a seamless payment processing residual stream purchase process for everyone involved.
Sell Your Credit Card Processing Account Portfolio
Mistakes to Avoid While Searching for a Credit Card Processing Account Buyer
A successful portfolio sale requires time and effort. Making mistakes along the way can cost considerable time and money. Learn about potential portfolio pitfalls below to avoid them.
Neglecting Buyer Research
Not vetting potential buyers can slow down or halt the selling process. Don’t put your portfolio’s worth in jeopardy. Investigate any buyer to ensure they’re experienced, reputable, and financially stable.
Not Having a Deep Understanding of Your Portfolio
Without knowing the ins and outs of your portfolio, you risk accepting a lowball offer. Avoid this mistake by clearly understanding your portfolio’s residuals, retention rates, and other valuable aspects.
Accepting an Offer That’s Too Low
Knowing you’re preparing to sell something as valuable as a portfolio can feel exciting. But don’t let this excitement cause you to rush the selling process. As with selling anything for sale, receiving a fair offer from a merchant services portfolio buyer can take time.
The Payment Processing Residual Stream Purchase Process
Finding the right credit card processing account buyer is essential. However, it’s also helpful to learn a quick overview of the portfolio sales process from start to finish.
Gather All Portfolio Information
Before speaking to a buyer, a portfolio can set themselves up for success by thoroughly assessing the worth of their cumulative accounts. This research also lets you go into negotiations with a clear understanding of your portfolio’s worth.
Research Potential Buyers
The next step is to find a legitimate and reliable merchant services portfolio buyer. As mentioned earlier, researching who is interested in your portfolio can help you avoid being lowballed or swindled.
Finalize the Payment Processing Residual Stream Purchase
This step involves reviewing the agreement proposed by a purchaser. Don’t hesitate to ask questions or for more information about anything unclear. It’s advisable to have a legal and financial professional look over this contractual agreement before signing it.
Complete the Post-Sale Process
As the portfolio sales process concludes, sellers should ensure a smooth transition for merchants. If you choose Velocity Funding as your merchant services portfolio buyer, you can be assured that your merchants will enjoy a streamlined post-sale experience.
Choose Velocity Funding as Your Portfolio Buyer
Velocity Funding is backed by over 25 years of experience as direct portfolio buyers. You don’t go through a third party or broker with our company. We specialize in providing maximum value offers for portfolios of all sizes. Our friendly and knowledgeable credit card processing account buyers purchase about 80% of the portfolios we examine.
We know no one wants to wait to get paid, so our merchant services portfolio buyers provide offers within 24 hours! Plus, we respond quickly to any concerns or questions you might have. Velocity Funding wants our clients to stay informed while they work with us.
Choosing a buyer with experience, transparent terms, a fair offer, and a focus on maintaining positive merchant relationships makes selling a portfolio and getting paid fast and easy. Whether you need an accurate portfolio, are ready to sell, or are both, Velocity Funding is here to take care of you – contact us today!
Sell Your Credit Card Processing Account Portfolio
Dean Caso is a Managing Partner at Velocity Funding, which he founded with this company’s other Managing Partner, David Caso, in 2006. Caso graduated in 1983 from Babson College with a Bachelor’s degree in Finance and Investments. With over 35 years of experience, Caso has acquired over 300 credit card processing portfolios. He has a superior eye for opportunity and an unwavering commitment to excellence. Caso’s leadership instills confidence, fosters innovation, and inspires those under his professional command. His decades of industry experience and proven track record of success continue to drive Velocity Funding’s growth and industry-leading presence.