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Welcome to BKW Servicing
As a federal firearms license holder, the process of opening a merchant account can come with some unique challenges. Having a merchant account is essential for any business, but being an FFL holder can come with additional complexities. Historically, financial institutions apply strict scrutiny during underwriting, which is the process designed to evaluate the risk of a business. For those operating in the firearms industry, the risk is typically very high. You will need to provide documentation of compliance with regulations, perceived risk, and knowledge about if an institution is showing bias against your shop.
This can all seem very daunting, but with the right strategies and preparation, you can complete the underwriting process efficiently and speed up the process of gaining approval. In this article, we will explore what firearm underwriting is, common mistakes to avoid, and tips to ensure you pass every time.
Underwriting requires a very detailed review of your business operations, business plan, and reputation in order to establish risk. This process can be rigorous for many reasons, including:
Federal firearms license businesses are required to comply with federal regulations, local laws, state laws, and the bureau of alcohol, tobacco, firearms, and explosives. As a result, financial institutions will want to make sure their clients are operating within compliance to reduce the risk of them having to face the brunt of liability.
Especially when vetting larger banks, these institutions are very weary of their public reputation and the risk of facing backlash. Due to political and cultural norms surrounding owning firearms, many institutions are worried about facing scrutiny from stakeholders and clients for having a partnership with gun shops.
Gun shops are also considered to be a high-risk business, they get this classification due to historically having large cash transactions, the frequency of fraud, and possible money laundering. While not all financial institutions have clear guidelines for underwriting, some will outright reject gun shops off the bat due to these reasons.
If you understand what underwriters are specifically looking for when evaluating your business, you will be able to prepare more effectively for your evaluation. Some key factors to pay close attention to are legal and licensing compliance, business operations, financial stability, and security measures.
Underwriters will be specifically looking for a valid FFL license, proper registration, and adherence to compliance and regulation policies. They will also want to see a clear and detailed business plan that shows the legitimacy of your operations. Showing proof of your inventory, purchase orders, and a workflow of your sales channels can be effective ways to prove this.
Your financial health will also be of extreme importance to underwriters. You can come prepared by including bank statements, tax returns, and financial forecasts for future months and years to come. With that being said, underwriters will also want to ensure that each payment is being completed in a secure way. Proof of secure payment systems, safeguards against fraud, and data protection can help strengthen your case as well.
Discover alternative payment solutions for gun shops without merchant accounts.
There are a few obstacles and challenges to prepare for as you engage in the firearm underwriting process. Let’s explore them below:
Before hitting submit, be sure that your paperwork is complete and in its entirety, as this is a main reason for delays and rejections from underwriters. Presenting your documents in an organized and clear fashion is also another way to speed up the process.
If the financial institution you are working with has negative connotations with gunshots due to a lack of education as to how important these establishments are for our economy, the payment processor May view your business as high-risk. Come prepared with a strong compliance record and clear business operations practices outlined to present.
If you were gun shop operates across multiple states, underwriters may be weary to work with you due to the risk of complying with various state regulations. It is important to provide clear documentation and proof that you are practicing strong compliance in every jurisdiction you operate in.
BKW Servicing specializes in streamlining challenges that FFL businesses face with tailored solutions to secure underwriting approvals quickly and seamlessly. We are committed to supporting your success by guiding you through the underwriting process and ensuring your application meets all requirements and is complete. We understand the firearms industry and are well-versed in regulations to help you mitigate risks associated with owning a gun shop and advocating for your success.
When working with us, you can expect transparent pricing with no hidden fees or surprise charges, so that you know exactly what your bottom line will look like. Are dedicated customer service team is always available to help address your concerns and give you peace of mind as you undergo the underwriting process.
While passing a firearm underwriting may seem challenging, it does not have to be. At BKW Servicing we are committed to helping gun shops Thrive through our specialized services to facilitate fast approvals, financial solutions, and compliance support for the firearms industry. Are you ready to simplify your underwriting process? Contact BKW Servicing today to learn how we can help scale your business and pass underwriting, every single time.