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.  

As a business owner, you have four real choices when it comes to business structures for building business credit, and two bad choices:

    * C Corporation

    * S Corporation

    * Limited Liability Company

    * Limited Partnership

    * Sole Proprietorship

    * General Partnership

You can learn more about your four good choices by listening to my FREE Business Corporations Seminar.

CLICK HERE to listen

To learn why Sole Proprietorships and General Partnerships are so dangerous to you and your family, read on.

A Sole Proprietorship is bad…

Have you heard the saying “You get what you pay for?” Well, you normally don’t pay anything to start either a Sole Proprietorship or a General Partnership. Of course you don’t get anything, either. Unless you count the following as valuable business assets:

    * Lots of personal liability

    * No protection from your business creditors

    * An increased risk of being audited

    * Problems with valuation for a subsequent sale of the business

The reason for this lack of protection is because neither of these structures is considered a separate legal structure. Instead, they are considered personal extensions of you, if you are operating as a Sole Proprietorship, or you and your partners, if you’re operating as a General Partnership.

And, because these business types are considered personal extensions of you, you don’t have any protection from them.

But a General Partnership is Downright Ugly!

It gets even worse if you are operating with a partner as a General Partnership. That’s because not only are you responsible for all debts and agreements you enter into in the name of your business, you’re also on the hook for all of your partner’s actions in the name of your business as well. This can be devastating if your partner is financially irresponsible, and, because either of you can bind the partnership; you have zero protection from your partner.

If You Don’t Choose a Good Entity, the Government Will Choose a Bad One for You!

If you’ve been doing business up to now without a business structure, both the IRS and your state government have defaulted your business into either a Sole Proprietorship or a General Partnership.

And that means you’re exposed.

Use a Proper Business Structure – If you want to build business credit and you want to protect yourself from personal liabilities.

CLICK HERE to join my business credit community today and discover what cash credit and financing opportunites you can obtain for your business entity. 

Remember – There is one thing stronger than all the armies in the world and that’s an idea whose time has come ~ Victor Hugo

To Your Success!

Marco Carbajo

About the Author

Marco Carbajo is a business credit specialist, author, speaker, and founder of the National Entrepreneur Club.  Click here to visit his blog and signup free to get strategies, resources, and credit building tips with blog updates, news, and more! To start building business credit join his business credit community today and Click Here.

It’s the opportunity to start business credit by establishing a business credit profile that is completely separate from a personal credit profile. 

The main problem still facing today’s small business owner is fewer than 10 percent know about or truly understand how business credit is established and tracked-and how it affects their lives and businesses.

Statistics even show that over 65% off all small businesses use credit cards on a regular basis; but the problem is less than half of those credit cards are actually in the business name. The others continue to use the owner’s personal credit cards for business transactions.

Here’s what others are saying about the importance of starting business credit:

“The longer you delay establishing business credit,
the longer you delay taking advantage of business loans.”

~ Wells Fargo Bank

“You should differentiate your personal credit from your business credit.”

~ Entrepreneur Magazine

“Before you apply, you should examine your business credit reports.”

~ Inc Magazine

One of the key advantages of having business credit is instead of putting your personal credit and assets at risk every time your company requires financing you would now be in a position to secure the financing you need with your businesses’ credit.

Here is the ‘Top 10 Reasons Why You Should Start Business Credit Now.’

1. Any debt you accumulate for the business would only report to your business credit file not your personal credit file.
2. Eliminate the co-mingling of funds–and this includes the “co-mingling” of credit profiles so you won’t jeopardize the protection of the corporate veil.
3. Protect you and your family from personal liability when you get approved solely on your businesses’ credit file.
4. Improve your personal debt to credit limit ratios by transferring the balances of business debt used with your personal credit to your business credit.
5. Eliminate personal liability you have on your existing business debt by balance transfer from personal credit to your business credit.
6. Increase your personal credit limit availability for you and your family.
7. Improve the appearance of your businesses’ funding capacity and stability.
8. Eliminate inquiries on personal credit when applying for business financing.
9. Increase your businesses’ ability to obtain cash credit 10 to 100 times greater then you can obtain personally.
10. Last but not least you SAVE MONEY! For example, an individual might pay up to 13% interest on a $100,000 line of credit whereas a business could qualify for an interest rate of 7%. That would save you almost $40,000 in interest alone.

Some other benefits include:

• Business credit cards have much higher limits than personal credit cards.
• Having the larger cash lines available for unforeseen expenses like expansion, equipment, operations or fulfillment
• Prevent the risk of damaging your personal credit
• You can build business credit even if you have bad personal credit
• Prevent the limits that lenders will impose on you for personal credit for you and your family’s needs
• Reduce your tax burden and improve accounting

Still not convinced you need to start business credit?

CLICK HERE to listen to a free Business Credit Seminar ($597 Value)

Every business will at one point require an influx of cash in order to cover operating expenses, expansion costs, legal fees, inventory or a range of other items the business may require in order to operate. The worst mistake you can make is seeking funding when your business needs it most. Lenders extend cash credit lines to businesses that don’t need the capital. Start digging your well before your business gets thirsty!

If you ask any business owner how they financed their business start up the answers usually are:

• Personal credit cards
• Tapped into home equity line
• Personal loan from the bank
• Personal loan from family & friends
• Private investors

One of the many risks that business owners face is using their personal assets as collateral or guarantee for business loans and financing. If the business owner defaults on a loan then, valuable items like a car, house, or bank account can be vulnerable to creditors’ claims.

Instead of jeopardizing your personal credit and assets every time your company requires financing, you can use the business’ credit rating to secure the financing you need with even more favorable terms and lower interest rates.

Start your business credit today!

To Your Success!

Marco Carbajo

About the Author

Marco Carbajo is a business credit specialist, author, speaker, and founder of the National Entrepreneur Club.  Click here to visit his blog and signup free to get strategies, resources, and credit building tips with blog updates, news, and more! To start building business credit join his business credit community today and Click Here.