Getting Business Credit
As small business owners recover from the recession it’s hard to imagine that getting business credit can be simple. However, the largest use of capital from business to business is the use of vendor credit lines which happens to be the single largest source of small business lending in America today according to the SBA.
So what is vendor credit?
Vendor credit is when a company, like an office equipment supplier, allows your business to purchase products and pay for them at a later date. Typically the terms range from Net 15, Net 30, Net 60, Net 90, or even Net 120 payment terms. These vendor credit lines work like a charge card meaning that the balance must be paid in full on or prior to the due date. Rather than struggle with getting business loans from financial institutions vendor credit also known as trade credit is an excellent option for new and existing businesses.
The primary benefit to getting business financing with vendor credit lines is that it will provide your business with thousands of dollars in products and services it needs up front while allowing your business to defer the payments for later. This helps you conserve cash flow for more critical short term expenses your business may have. The flexible payment terms also allows your business plenty of time to pay the invoice when it comes due.
A second benefit is vendors report your positive payment experience to the business credit bureaus. The more vendors you are getting corporate credit and payment experience with the stronger the profile you will build. This alone can positively impact the size of the credit limit recommendation for your business which is determined by dun & bradstreet and publicly disclosed on your file. As a result getting a business credit card without a personal guarantee can be much easier for your company to obtain.
However, one of the biggest mistakes made by small business owners is assuming that every vendor reports their payment history to the bureaus. Currently there are over 500,000 vendors who extend lines of credit to businesses but less than 6,000 report your payment experience.
So if getting corporate credit to build business credit history is a must be sure to select vendors that report. Be sure to also ask what agency they report to and how often they report. You can verify this by inquiring with a vendor that you plan to apply with. If this sounds like too much work then I suggest joining my Business Credit Insiders Circle and gain access to our premium vendors, credit sources, and much more.
One of my favorite aspects to getting a business line of credit with a vendor is the minimal qualifications required for approval. In many cases an application only requires your business contact information, Federal Tax ID#, Dun & Bradstreet#, authorized name and signature and not your social security number or personal guarantee.
The specific vendors requesting only this information will pull a business report to base their approval which makes building business credit with trade suppliers much easier and more convenient compared to credit cards or loans. A prime example of one of these types of vendors is a company called Quill.
Quill offers a net 30 account and reports to Dun and Bradstreet. Best of all they report your payment history every 30 days. For small orders you can get approved if your business has a listing on the 411 directories and a working website. New businesses can start out with smaller limits that will increase when you pay on time every month.
I also encourage every one of my client’s to join my Business Credit Insiders Circle. As a member they gain access to all the information, sources, videos, audios, and content not available to the general public. In addition each month we report their membership payments to Dun & Bradstreet!
As you can see getting business credit with vendor credit lines can be an ideal source to fund short term needs at the same time provide your business a way to build a strong file while avoiding the use of your personal credit and guarantee.
To access business credit insider secrets, premium vendors, leasing companies, business credit cards, and lenders that report to all the major business credit bureaus become a member of my Business Credit Insider’s Circle. Submit your name and email below for details and receive a free audio seminar ($597 value) =>
Marco Carbajo is a business credit specialist, author, speaker, and founder of the Business Credit Insiders Circle. He is a weekly columnist for Dun & Bradstreet Small Business Solutions, a business credit blogger for All Business & American Express Small Business and author of “Eight Steps to Ultimate Business Credit” and “How to Build Business Credit with No Personal Guarantee.” His articles and blogs have also been featured in The Scotsman Guide, Alltop, Entrepreneur Connect, and Active Rain.
January 24th, 2010 at 3:33 am
Hi Marco,
Nice topic you provide here. I just found your blog and happy to read this entry. Good info.
Can I copy to my blog?
Thanks
January 24th, 2010 at 12:47 pm
Thankyou for the feedback and you can always grab my RSS feed to keep up to date on my posts.
April 13th, 2010 at 5:49 pm
Wow man, I never knew this, much appreciated.
April 21st, 2010 at 6:30 pm
My friend referred me to your blog, so I thought I’d check it out. Very interesting insights, will be back for more!
April 21st, 2010 at 10:30 pm
Thanks Jerry! Appreciate the visit and hope to see you back soon.
May 11th, 2010 at 9:06 am
I find your website very informative. I love coming back to it each day to read additional content. Your site has been one of my favorite ones for the last few weeks and I would love to become a full time subscriber. I hope your content keeps going the way it is, and I will participate in many discussions if given the opportunity.
May 16th, 2010 at 2:46 am
Very good posts. I just came across your website and wished to say I have really enjoyed reading your web site posts. Any way I’ll be subscribing to your feed and I hope you post again soon.
June 21st, 2010 at 10:53 am
I am a student and currently studying Forensic Science, but the information on your site helped me in one of my recent projects I was working on. I have provided the link to your site in my report and actually posted a link back on my education blog. Hopefully that will get some additional respect to you, as you deserve it. Thank you.
June 21st, 2010 at 2:31 pm
Thank you for the comment and appreciate the link. Looks like your blog has a lot of great info for government grants in Australia. Nice work!
June 21st, 2010 at 5:57 pm
This is just what I was looking for thanks for the info!
June 22nd, 2010 at 12:35 pm
Your welcome!
All the best,
Marco
August 5th, 2010 at 9:43 am
I am a student and currently studying Forensic Science, but the information on your site helped me in one of my recent projects I was working on. I have provided the link to your site in my report and actually posted a link back on my education blog. Hopefully that will get some additional respect to you, as you deserve it. Thank you.
August 6th, 2010 at 7:56 am
Hi Marco, I have been reading your sites content for a while now, actually, probably since you started. It consists of very intriguing and informative content. I love to start my day off at times just by browsing through and seeing if there is anything new up on the site. Good work, I really hope you can get in touch with me and we can possibly have a chat together. Would love that.
August 6th, 2010 at 12:00 pm
Thanks Edie,
Appreciate the positive feedback and sounds great. Send me an email at ceo@startbusinesscredit.com and let’s go from there.
All the best,
Marco
August 6th, 2010 at 12:08 pm
Thanks Jeff, appreciate the link and good luck on your project.
Marco
August 23rd, 2010 at 11:04 am
Thanks for the tip!
I am going to add your blog to my list!
September 8th, 2010 at 11:16 am
hey Marco, nice blog…really like it and added it to bookmarks. keep up with good work
September 9th, 2010 at 4:49 pm
Thanks John! Appreciate the feedback.
All the best,
Marco