Improving your personal credit was hard enough, but now as an entrepreneur, you have to focus on building a business credit score. While it is not an easy task, it has many benefits, including a higher approval chance for business loans, separating your personal and company assets, and gives you the ability to negotiate better interest rates and loan terms. A high business credit score is a must if financing your business through loans is your primary source of capital.
- What are vendor credit and net-30 accounts?
- Why use a net-30 account in your business
- Net-30 vendors that can help you
Vendor credit is credit given to you by your suppliers or business that you work with. The different types of vendor credit that companies can offer includes, Net-30, Net-60, credit cards, and loans.
Net-30 vendor credit is a credit account that allows you to buy products or services now and pay for them later. With a Net-30 account, you have 30 days to pay the bill in full from the day you purchased the products.
- When you pay your accounts on time, these vendors will report your payment history to the business credit report agencies, which will help build your business report and credit score.
- You can establish trade references for your business. When you apply for a loan, lenders can see that you have worked with prior companies and made payments on time. These trade references build up a history of good standing.
- Suppose anything negatively affects your business credit score. In that case, you can be confident knowing your personal credit won’t be affected at all since the vendors will use the EIN attached to your business.
- Many Vendors will offer a discount if you make early repayments.
Here are some examples of vendors that can help build your business credit. Remember to research any company thoroughly before committing to make sure they’re the best match for you.
Grainger Industrial Supply
Grainger is an industrial supply company that has been around since 1927. They offer over 1.5 million products to choose from, ranging in various categories, including security, lighting, material handling, packaging, and office supplies. Grainger Industry Supply often reports to Dun & Bradstreet.
You can register a new business account on Grainger’s homepage. Within two days, the setup will be complete, and you should receive an email with your unique account number.
Once your account is registered, you can email the company and request to set up a Net-30 credit line.
Uline has been around since 1980, with distribution centers all over the United States, including Mexico and Canada. They have over 37,500 products in their catalog.
Suppose you have a retail or e-commerce store. In that case, Uline offers warehouse appliances, automated handling, cleaning supplies, maintenance equipment, poly bags, shipping supplies and boxes.
Uline makes it easy to open a Net-30 account by registering on the site using your customer number.
Quill is an office supply retailer that has been around since 1956 and has been recognized as one of America’s best customer service companies two years in a row by Newsweek.
Your business can benefit from 100,000 products in categories, including stationery, electronics, furniture, workwear, breakroom supplies, and tools. The site has massive deals with some products up to 60% off.
Quill customers who have a business account are eligible for a credit limit which they can use to place orders and pay within 30 days. After you have placed your first order, you are eligible for a Net-30 account.
Staples has been around since 1985, with 1,067 stores across the United States and 330 in Canada. Staples has over 7,500 products to choose from, including office supplies, printers, electronics, furniture, cleaning supplies, and shipping packages.
Staples pride themselves in offering their customers great deals and up to 5% back in rewards, on top of adding free shipping on all orders.
Staples will offer a $1000 credit line and a 30-day repayment option if you have a limited credit history. They will report your activity back to Dun & Bradstreet.
Strategic Network Solutions
Strategic Network Solutions is an I.T service company with over 50,000 clients. The services they offer include proactive support, endpoint security, business continuity, and disaster recovery.
You can establish a $2,000 Net-30 term account by purchasing an $80 downloadable product and clicking the Net-30 option at checkout, allowing you to pay your invoice within the next 30 days.
Summa Office Supplies
Summa is a California-based company that offers deals on office supplies with well-known names, including Bic and Sharpie. Different products include pens, filing folders, envelopes, markers, adhesives, labels, legal pads, and correction supplies. Before you can look at Summa’s product catalog, you will have to register an account with them.
Summa has a tier-one option that includes digital products and software. It is easy to qualify for a Net-30 account. Purchases that are over $75 are reported to Equifax business.
Their two-tier option is for established businesses as it is harder to qualify for, but any purchase made over $75 is reported to Dun & Bradstreet.
Vendor credit is an easy way, using a small amount of money, to improve your business credit score. While it can take a long time to build a credit history, Net-30 accounts are the easiest to qualify for if you are an up-and-coming business.
While you might not need a business loan at this time, there can come a stage in your business career where you find yourself running low on funds. If that is the case, then building your business credit score from day one can make a world of difference.
Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.