5 Business Credit Cards with Benefits That Will Surprise You

Get Business Credit Cards with Benefits – Check Out Some Unique Perks

There are business credit cards with benefits that go way beyond cash back or a low APR. Come and check out some truly unique perks.

Business Credit Cards with Benefits That Are Unique

Some business credit cards have unique benefits not fitting under any other categories, like low APR or cash back.

Some of these cards enroll you in some sort of unique benefits program. Still others may offer certain purchase discounts. And some of these aren’t quite available yet. Here’s our top 5 and a few honorable mentions.

Keep in Mind

Terms and rates are subject to change. In particular, many annual percentage rates tie to the Prime Rate. Banks and other credit providers sometimes add or drop features, or even credit cards. As always, the best source for all credit card information will be right on the provider’s website.

Business Credit Cards with Benefits Where You Can Buy Crypto: Honorable Mention – Gemini Credit Card from MasterCard (personal)

The Gemini credit card came about after Gemini’s recent acquisition of Blockrize. Blockrize already had a cryptocurrency credit card in the works. Buy crypto with this soon to arrive credit card, slated to be available in the summer of 2021.

With Gemini Earn, you can earn interest on your cryptocurrency. This compounds daily, up to 7.4% annual percentage yield. Until the card is issued, it will be hard to assess who it would be best for. Although backing from MasterCard is good news.

Unique Benefit Credit Cards: Honorable Mention – Mercury Bank MasterCard (personal)

Mercury is an angel-funded bank serving startups. Pay a $0 or $79 annual fee. Transfer APR is $5 or 4% of amount of each transfer, whichever is more. There are cashback rewards for the Mercury Bank MasterCard, but they are not specified on the bank’s website. Pay 26.99-29.99% APR. This is a good card for startups but the interest rates are high, so be sure you can pay on time before you start charging.

Business Credit Cards with Benefits Where You Can Get Amazon Discounts: #5 – Amazon Prime Store Card

If your business shops at Amazon often, then this could be the card for you. You get a $60 Amazon gift card upon the approval of your application. Get 5% cashback on Amazon purchases. And you pay no annual fee. However, limits for the Amazon Prime store card seem to be low. There are reviews of this card on the Amazon website and you should check them before applying.

Business Credit Cards with Benefits for Veterans and Active Armed Forces: #4 – Navy Federal GO BIZ Rewards Card

This Navy Federal business credit card is available as either a MasterCard or Visa. Benefits differ depending on which card type you choose. Get 1 point for each dollar spent but rewards depend on if you have a Visa or MasterCard. With a Navy Federal Visa, you get access to Visa SavingsEdge. With a MasterCard, you get a collision damage waiver.

Pay no foreign transaction fees. There is no earnings cap and there is no annual fee. Pay an APR as low as Prime+ 5.90%.

Get GO BIZ Rewards. You can redeem points for gift certificates, cash deposited into your savings account, and more. Note: this card comes from a credit union, and you must be a member first. You can only be a member of the Navy Federal credit union if you’re attached to the military, the Department of Defense, or the National Guard and their families. If you can qualify for this card, the interest rate is stellar and it goes beyond an introductory period.

Unique Benefit Credit Cards: #3 – Brex Credit Cards for Startups

You will not need to provide a personal guarantee. They will underwrite based on your EIN. Only companies organized and registered in the US may apply for a Brex account. These are like C-corps, S-corps, LLCs, or LLPs. Pay no annual fee for the Brex credit card for startups.

Get unlimited points. You can get 7x points on rideshare. Get 4x points on Brex travel. You get triple points on restaurants. Get double points on recurring software costs. And get 1x points on everything else.

Earn points on everything you buy. Redeem them for Bitcoin or Ethereum through Brex’s partner TravelBank. But there are some industries they will not work with, as well as others where they want more paperwork. They will not accept the cannabis industry, and crypto is a restricted industry.

Credit Cards with Benefits Where You Can Build Personal (and Some Business) Credit: #2 – Sofi Credit Card (personal)

While this is a personal card, the perks are so unique we had to include it. You can earn 2% cash back on all eligible purchases. You can redeem your cash back straight into crypto with a SoFi active invest account. Pay no annual fee and no foreign transaction fees.

Make 12 monthly on-time payments of at least the minimum due, and SoFi knocks 1% off your APR. Otherwise, standard variable APR for purchases is 12.99-24.99%, based on creditworthiness. The SoFi credit card‘s APR ties to the Prime Rate. Balance transfer APR is 12.99-24.99%, based on creditworthiness.

Perks programs include the Sofi credit card rewards program. Rewards include a Lyft credit for a minimum number of rides taken in a month, once per month. There’s also the Sofi member rewards program. That’s where you can apply points toward loans, including student loans, and Mastercard World Elite.

Credit Building

Since this card lets you plow points into paying off loans, it can improve your personal credit. And paying on time will improve your personal credit even more. Experian’s business credit score calculations include personal credit scores. So, indirectly, this card could help you build business credit.

Business Credit Cards with Benefits to Help You Manage an SBA Express Loan: #1 – Zions Bank SBA Express Business Visa Debit Card

The Zions Bank SBA Express Business Visa debit card is #1 because it floored us. And then we wondered – why doesn’t every SBA Express lender do things this way? Pay no membership/account fees. Use this card to manage SBA Express loan money from Zions Bank that’s already approved.

Get travel accident insurance and other credit card perks, which you would not normally get from an SBA Express loan. This card is only available to SBA Express borrowers. If you’re an SBA Express borrower (or want to become one), we could not find a downside to getting this card.

Small Business Credit Cards with Benefits: Takeaways

Business credit cards with benefits have positives beyond lower APRs and travel points. Buy bitcoin, or access Visa SavingsEdge, or the MasterCard Easy Savings program. Or pay low interest rates by leveraging a connection to the armed forces. Or even manage an SBA Express loan. But never forget: the best business rewards credit card is the one you’ll use, with rewards that make sense to you.

Let us work with you, and help you decide on what’s best for you and your business.

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Why do Lenders Prefer Using a Personal Credit Score to Approve a Business Loan?

Your Personal Credit Score Can Make a Difference When You Apply for a Business Loan

If you’re a small business owner, don’t assume your business credit is separate from your personal. If you apply for a loan, lenders will consider it on your personal credit, not your business credit. Your business credit score is considered on its own only if your company generates millions in annual income. Otherwise, assume that your personal credit score will matter.

Solid personal credit is a necessity. The need to build and maintain it never goes away for most small company owners.

Some lenders (like banks) place more importance on personal scores. This is for checking business loan applications.

To establish your business’ creditworthiness, most lenders first analyze your personal credit score. This happens with organizations in operation for only a few years. It also happens with businesses seeking their first business loan.

So, small business owners must focus on creating a solid business credit profile. This is along with building a good personal credit score.

What is the Difference Between Business Credit Score and Personal Credit Score?

Here are the main variations between company personal credit scores:

Business credit reports use Employer Identification Numbers (EINs). Personal credit reports use Social Security numbers (SSNs).
The ranges of personal and business credit scores are very different. Business scores tend to vary from 0 to 100. The range of personal credit scores is 300 to 850.
Experian manages both business and personal credit. They use separate databases and departments if you have both kinds of credit.
You can freeze or lock personal credit reports. But business credit reports cannot be locked or go under security freeze.
Different rules apply to data used in business and personal credit reports.
Anyone can examine your business scores (they must buy the report and scores). But only you and others who have your authorization can access your personal scores.

When do Lenders Consider a Personal Credit Score for Approving Business Loans?

When reviewing creditworthiness for a business loan, most lenders check personal credit history.

But some lenders will give your personal credit score less weight than others. Lenders may pay less attention to a poor personal credit score if you already have a track record of solid business credit.

Your personal credit will matter more for a business loan when any (or all) of the following are true:

a. If You’re Seeking a Loan from a Bank or Other Conventional Lender

You should assume banks have strict lending rules and often aren’t too flexible. But private lenders offer financial help. It’s in the form of business loans with low credit requirements. They provide funds considering a business owners’ personal score. This is even if the business score is low. Here, conventional lenders may check personal credit scores to offer you a business loan with flexible terms.

b. If Your Business is a Startup or Small in Nature

If your business score does not have enough info for lenders to check credibility, they will place a higher value on personal scores.

This can be the case with sole proprietorships or small businesses with few employees. Here, it may be hard for a conventional lender to distinguish between your business credit report and personal credit reports.

c. Your Personal Credit Score is Relatively Low

Even if you have a few old negative entries on your personal credit report, getting a business loan shouldn’t be tough. If your business’s credit history is excellent, then it shouldn’t be a problem.

But too many negative items on your personal credit history may damage your score. A low personal credit score is something a lender will notice and consider as a risk.

Your personal credit score reflects how you manage your personal credit liabilities. But some may argue that your personal credit score has nothing to do with how your business operates its business credit liabilities.

As a business owner, understand how your credit score is calculated, and how it’s used when you apply for a credit. And understand what you should do to improve it.

How is a Personal Credit Score Calculated?

The Federal Government improved credit reporting quality with the Fair Credit Reporting Act in 1970.

The consumer credit bureaus collect information from a consumer’s credit profiles to create FICO scores. Experian, Transunion, and Equifax are the three largest credit bureaus. These three major credit bureaus maintain the same basic formula to rate your credit. A personal credit score ranges from 300 to 850 and is rarely identical.

They calculate your FICO score using this basic, widely used formula:

Payment History (35%)

Late payments, judgments, and bankruptcies are problematic. So are debt settlements, repossessions, charge-offs, and liens in your credit report. They will lower your personal credit score.

Debt Owed (30%)

Your personal credit score also depends on your debt-to-credit limit ratio. And it depends on the number of credit accounts, the total amount of credit balances, and the amount paid off on installment loans.

Credit History (15%)

Your credit history plays an integral part in building your credit score. The average age of the accounts and the length of your oldest credit account are the two most important criteria. The longer (or older) the file is, the better. This is because the score tries to forecast future creditworthiness based on past credit history.

Credit Types (10%)

Having different types of credit shows your ability to handle many credit accounts. These types include revolving, installment, and mortgage credit. It will definitely have a positive impact on your credit score.

New Credit Accounts (10%)

Each new “hard” inquiry on your credit report may have an adverse effect and may lower your score by 10%. Per Experian, these inquiries may stay on your report for a few years. But they will have no impact on your credit score after the initial year.

How Does This Information Build Your Credit Score?

Credit bureaus collect personal information like your name, date of birth, location, occupation, and more. They’ll also prepare a list of information that the creditors provide. Other information, like judgments or bankruptcy, will appear on your credit reports. It becomes part of your personal credit score. When you apply for new credit, your creditor will see all that info in your credit report and check your score.

If you find any inaccurate data reported, the credit bureaus have procedures in place to correct verifiable mistakes. Amendments to the Fair Credit Reporting Act in 1996 allow you to put a 100-word statement on any report that includes an item you dispute.

A range of factors can drive a bad credit score, including a divorce, severe illness, or loss of employment. This allows you to ensure that potential creditors are aware of the information.

Here’s what a potential creditor sees when they look at your score:

800-850 (Exceptional)

You should expect lenders to treat you like a king! With a credit score above 800, you can choose the best credit alternatives for your needs, and the best interest rates, from any lender you choose..

740-799 (Very Good)

If you have a credit score inside this range, lenders will treat you as a low-risk borrower. You can get a loan from almost any big lender with affordable rates. With this credit score, you can choose the best business loan that fits your business needs.

670-739 (Good)

This is a good score, and many people in the United States fall into this category. With this score, a borrower can hope to have more choices and approvals from various lenders.

580-669 (Fair)

This is a score that indicates a significant level of risk. A small business loan is feasible, but the interest rates will often be higher. If your score is in this range, you will have fewer possibilities than those with a higher level.

Most conventional lenders will not consider borrowers in this group for a small business loan. A personal credit score of 660 is the lowest that the SBA will typically consider.

300-579 (Very Poor)

Borrowers with this credit score can access some credit. But it’s considered a high-risk credit score. So there will likely be fewer possibilities and higher interest rates. If your score falls in this range and you want to get a business loan, consider offering some collateral.

How To Improve Your Personal Credit Score?

There is no simple solution to fix your personal credit score issues. But that doesn’t imply you can’t increase your score with time and effort. Here are six strategies to improve your personal credit score:

Analyze Your Score

You are entitled to get a free credit report once a year from annualcreditreport.com. You can get your credit report as many times as you want from all three major credit reporting agencies. These bureaus provide credit monitoring services for an affordable fee. Get your report from them and analyze it properly.

Make Good Use of Credit

This may sound oversimplified, but it’s critical. Resist the urge to use all your credit limits all the time. This is so even if you pay off the total outstanding debt balance every month through credit card debt consolidation. Using all the available credit further can damage your credit score.

Keep credit usage to roughly 15% of your available credit limit to increase your credit score.

Make Your Payments On Time

This is most likely the best and most successful strategy to improve your score. How fast you make payments and satisfy your liabilities makes up 35% of your score. A single late payment can significantly reduce your credit score.

Do Not Apply for Excess Credit

Applying for unnecessary credit reduces your credit score. So if you’re attempting to raise your score, it’s not a good idea.

Don’t Transfer Balances Too Often

Transferring balances from one credit card to another does not affect your credit score. But, it’s generally known as a wrong financial move that could harm your personal credit. Frequently transferring balances can put a bad impression on your future creditors.

Have Patience and Keep Trying

Improving your credit score requires strong determination and hard work. Your constant effort over six months or even a year can make a significant difference. But missing a payment or two will almost certainly lower your credit score fast.

About the Author:

Lyle Solomon has considerable litigation experience. He has substantial hands-on knowledge and expertise in legal analysis and writing. Since 2003, he has been a member of the State Bar of California. In 1998, he graduated from the University of the Pacific’s McGeorge School of Law in Sacramento, California. He now serves as a principal attorney for the Oak View Law Group in California.

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How to Get Merchant Cash Advance Financing for Your Business

Merchant Cash Advance Financing Can Help Your Business

Is merchant cash advance financing on your radar? If you’ve got bad personal credit, or not a lot of time in business, merchant cash advance financing could be your best bet for business financing.

Getting Business Financing

Financing for your business tends to come from one or more of the following types of sources:

Collateral
Cash flow
Leveraging good business and/or personal credit

Two other ways to get financing are:

Selling off a part of your business
‘Freeish’ sources like grants and crowdfunding

With crowdfunding and grants, you’re giving up time and brainpower, rather than collateral or some form of security.

Let’s look at using forms of business collateral. This includes converting your merchant cash advances into business capital.

Using Business Assets as Collateral for Loans

Business collateral can be:

Merchant cash advances
Accounts receivable
Equipment that you own
A book of business (renewable commissions) if you’re buying an insurance agency
Inventory
Commercial real estate

Using Merchant Cash Advances as Collateral for Merchant Cash Advance Financing

Not-yet paid credit card sales authorizations are worth money! MCAs are a response to the fact that you need to wait a bit to get your money. As a result, your wait time is slashed, and you get the benefit of taking credit cards and payments in a fraction of the time.

Net 30 Terms

Net 30 means a company or person you extend credit to will have thirty days to pay the bill in full. Being able to offer your customers a month to pay you back is a real competitive advantage. It could be what sets you apart. But you’ve also set yourself up with a wait of about a month for the money. Merchant cash advance financing can help to fix all that.

How to Get Merchant Cash Advance Financing for Your Business

An MCA technically isn’t a loan (so you can’t truly call it a merchant cash advance loan). Rather, it is a cash advance based on the credit card sales of a business. A small business can apply for an MCA, and have an advance deposited into its account fairly quickly. So you can offer Net 30 terms, but not have to wait a month to get paid.

A merchant financing program is based on your cash flow as verifiable per your business bank statements—and nothing else. Hence merchant cash advance companies in general will not ask for any burdensome document requests.

How do merchant cash advances stack up against other forms of financing?

Business Credit vs. Merchant Cash Advance Financing vs. Cash Flow Financing

With MCAs, merchant cash advance lenders check your credit card sales, and with cash flow financing, they check all of your cash flow. But with business credit, providers will check your business setup, which is why we talk about fundability so much. And once you have a PAYDEX score, they’ll check it as well.

With business credit, starter vendors often won’t have a time in business requirement. But retail and business credit card providers tend to. Contrast this with MCAs, where you often need to be in business at least 6 months, and cash flow financing, where you often need to be in business for at least a year.

With cash flow financing, lenders want to see accounts payable and accounts receivable. Lenders want to see your bank statements if you’re trying to get an MCA. But with business credit, starter vendors want to know you will pay them back. So they will check your fundability. This means they will want to see you have an EIN, a D-U-N-S number, all the licensing you need, etc.

Details

With cash flow financing, paying the loan back depends on future company profits. But business credit doesn’t depend on anything in particular to pay it back. It’s best practices to pay out of your business profits and/or assets. And with merchant cash advances, future payments to the business by customers is the way you’ll pay back the advance.

Get a merchant cash advance, and you won’t have to pay any interest. Your sole fee is to the lender–it’s compensation to them for advancing you the funds. This form of financing can also be interest-free, but only if you pay on time.

If you don’t pay your business credit cards and starter vendor cards on time, then interest rates will vary. In addition, better FICO scores and/or better business credit will garner you better rates. But with cash flow financing, you will be paying interest no matter what.

Your FICO score will matter more for cash flow financing and business credit. With business credit, better FICO scores will help you get better rates, and some providers may require them. Cash flow financing can often require a higher minimum FICO score than for merchant cash advances. And for MCAs, you can usually have a lower minimum FICO score.

Which Form of Business Financing is Best?

You should always be trying to build your business credit. This is so even if you’re going with a different form of business financing. For a newer business, which has been around for at least six months, MCAs can be a way to get fast cash while still offering good terms to your clientele as you build your business.

And for more time in business, if your cash flow is stable, cash flow financing can be another viable option. And there’s no reason you can’t try two of these or even all three. See what works best for your circumstances.

Merchant Cash Advance Financing: Terms and Qualifying

A lender will review 3 months of bank and merchant account statements, to look for consistent deposits. They want to see deposits showing revenue is $50,000 or higher per year. They will also verify time in business of 6 months or more.

Lenders don’t want to see a lot of Non-Sufficient-Funds (NSFs) showing on your bank statements. They don’t want to see a lot of chargebacks on your merchant statements. And they want to see more than 10 deposits in a month going into your bank account. In a nutshell, they want you to manage your bank and merchant accounts responsibly.

Lenders will want to see a decent number of consistent credit card transaction deposits each month. But what a merchant cash advance lender considers to be ‘decent’ is going to vary from lender to lender. And be aware, interest rates for merchant cash advances can be high.

Choosing a Merchant Cash Advance Financing Program

Always look at interest rates. Because MCAs don’t have federal regulation, terms can seem outrageous. Also check if your payment schedule is fixed or if it’s a percentage of credit card sales. A percentage of card sales means your payment goes down if sales falter, but of course they go up if your sales are robust.

And investigate similar programs like not just cash flow financing and business credit, but also invoice factoring, as they might be a better fit. Our Business Finance Suite has MCA providers you can check out, too!

Merchant Cash Advances and Inflation

Inflation causes price increases for goods and services. And it can also affect how you price your own goods and services. Inflation can cut into your profit margin unless you raise your prices.

How can MCAs help?

By getting use of your money faster, an MCA can help you to buy your own goods and services—and even equipment—before it gets pricier. If you’re using the cash from MCAs to pay off loans faster, then speed will help you avoid paying more in interest.

MCAs are also helpful because you get a payment even though you may have charged less. When the customer buys from you again, if you need to raise prices, you aren’t also waiting around for them to pay what they owe you.

Merchant Cash Advance Financing: Takeaways

Merchant cash advances can make it easier and more logical to give net 30 terms to your customers. You can be paid a lot faster, which eliminates the main disadvantage of offering net 30 terms. MCAs are within reach even if you have a lower FICO score. But keep in mind that interest rates can be high.

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Get the Best VA Small Business Loan for Your Business

Yes, You Can Get VA Small Business Loan—Here’s How

Veteran-owned businesses tend to be small, and of course they require working capital. But where can veterans get a VA small business loan?

Programs for Veterans to Get a VA Small Business Loan and More

Veterans can get a VA business loan through entities like:

The US government (SBA)
Private websites
Online lenders

Plus, there are programs not specifically for small business loans for veterans which they may qualify for as well.

Get a VA Small Business Loan via an SBA Veterans Advantage Guaranteed Loan

The SBA provides fee relief on small-dollar loans. This helps to reduce barriers for veteran-owned small business, so they can access capital and create jobs. The SBA uses a credit scoring model to help reduce underwriting costs and processing time for a VA SBA loan.

For loans of $150,000 or less, the upfront guaranty fee is zero. The upfront guaranty fee is also zero for SBA Express Loans. For loans not through SBA Express, the upfront guaranty fee for loans to veteran-owned small businesses for $150,001—$500,000 (inclusive) is 50% less than the upfront guaranty fee for non-veteran owned small businesses. For loans for over 12 months, the fee is 1.5% of the guaranteed part. And for loans for 12 months or less, the fee is 0.125% of the guaranteed part.

Details

For loans of $500,001—$5,000,000 (inclusive), upfront guaranty fees for 7(a) loans made to veteran-owned small businesses depend on the loan amount and the loan’s. For loans with a term of over 12 months, guaranty fees are:

Loans of $500,001—$700,000: 3% of the guaranteed part
Loans of $700,001—$5,000,000: 3.5% of the guaranteed part up to $1 M
Plus 3.75% of the guaranteed part over $1,000,000

For loans for 12 months or less, the guaranty fee is 0.25% of the guaranteed part.

Qualifying for SBA Veterans Advantage

A small business must be at least 51% owned and controlled by a person(s) in these groups:

Honorably discharged veterans
Active Duty Military service members eligible for the military’s Transition Assistance Program (TAP)
Active Reservists and/or active National Guard Members; or
Current spouse of any veteran, Active Duty service member, Reservist, National Guard member, or the widowed spouse of a service member who died while in service or due to a service-connected disability

FYI, if you’re looking for a Patriot Express loan, the SBA doesn’t offer those anymore.

Get a VA Small Business Loan from the Military Reservist Economic Injury Disaster Loan Program (MREIDL)

The Office of Veterans Business Development (OVBD) administers this program. Eligible small businesses can get loans up to $2 million. Pay a fixed 4% interest rate with a maximum repayment term of 30 years. The purpose of these loans is to cover operating costs a business cannot meet due to the loss of an essential employee called to active duty in the Reserves or National Guard. It comes directly from government benefits.

Or get a VA Small Business Loan from the Service-Disabled Veteran-Owned Small Business Concern Program

Government financing can also come in the form of preferences for contracting work. The federal government’s goal is to award at least 3% of all federal contracting dollars to service-disabled veteran-owned small businesses each year. To qualify, businesses must be at least 51% owned and controlled by one or more service-disabled veterans. And one or more service-disabled veterans must manage day-to-day operations and make long-term decisions. Eligible veterans must have a service-connected disability. These are some of the best business loans for disabled veterans.

SBA Microloans Can Be a Good Alternative to a VA Small Business Loan (If You Do Not Need Too Much)

Available to both veterans and non-veterans, the SBA provides microloans to small businesses that cannot typically qualify for other lending options. SBA microloans currently go up to $50,000.

Microloans often have higher interest rates of 8%—13%. Often, a microloan requires collateral and heavy paperwork, including a business plan, various tax returns and financial projections for the business. Average SBA microloan size is about $13,000.

Supplement a VA Small Business Loan with a Grant from The StreetShares Foundation

This is a 501(c)(3) nonprofit organization. Its programs provide access to capital opportunities, educational content, mentors, coaching, and networking events. Its programs serve military community entrepreneurs nationwide. Their VA small business grant program, the Veteran Small Business Award, provides financial support to help veterans start or grow small businesses.

The StreetShares Veteran Small Business Award

Apply via video pitch. Tell the Foundation about the business and its social impact on the military community. Convey, in the written application or video pitch, your strategy for resilience in response to rapid market change prompted by the pandemic crisis.

They also evaluate your nonprofit or business entity on its positive social, community, educational, military-transition, veterans’ employment, health & wellness, or veterans’ mental health/spiritual impact, on the American military and veteran community. This is in addition to or in conjunction with business or nonprofit functions. Awards run $4,000—$15,000.

The StreetShares Foundation Military Entrepreneur Challenge

Qualified applicants submit their pitch on video. 8—15 finalists are chosen, then voted on, at the Foundation website. Awards are as follows:

$15,000 for first place
$4,000 for second place
$2,500 for third place

Qualifying for The StreetShares Foundation Military Entrepreneur Challenge

Applicant must be a veteran, reserve or transitioning active duty member of the US Armed Forces. Or they can be a spouse of a military member or the child or immediately family member of a Military Member who died on active duty. Applicants must own at least 51% of the business entity described in the application. Grant funding is for veterans and military spouses who are low-income or otherwise lack financial means and have a goal to start or grow an early-stage business or nonprofit.

So FYI, the USAA small business loan program with Street Shares has ended.

Get Work Vessels for Vets and Use a VA Small Business Loan for Other Expenses

This charity offers grants to veteran-owned small businesses. Their purpose is to help returning vets transition from military service to the civilian workforce. The program provides new or used equipment (adapted to accommodate injuries if needed) to returning veterans starting a non-farming business. So this equipment has been everything from laptop computers to commercial fishing boats.

More Programs

They also have a program for vets starting farms or ranches, and a program for nonprofits serving veterans. Still, they give preference to post-9/11 returning combat veterans. To qualify, you must provide a business plan.

Average vessel value runs about $5,000—$6,000. But the charity defines ‘vessel’ as anything a vet would need to do business, like tools or farm fencing. Charity Navigator gives them a failing score, but that may be more due to a lack of information versus anything nefarious.

Hivers and Strivers

Hivers and Strivers is an Angel Investment Group. They focus on early-stage investments to support start-up companies founded and run by graduates of US Military Academies. Also, they typically invest $250,000—$1 M in a single funding round and provide active involvement.

Hivers and Strivers involvement includes serving as board members and advisors and providing counsel and offering expertise. Venture Capital for Veterans will soon take over funding. Because they are affiliated with Hivers and Strivers.

Veteran Ventures Capital

This is an investment group. Any veteran-owned businesses can apply for funding. They also offer a full range of consulting services to ensure business success. As a Service-Disabled Veteran Owned Small Business, they also have ties to government contracting to aid veteran entrepreneurs in expanding their opportunities to work with federal agencies.

Through their government solutions branch, they offer help with budgeting and professional staffing, along with product procurement, and getting government contracts.

Veterans Business Fund

VBF is a not-for profit organization, established to aid veterans by providing supplemental capital required to satisfy the equity requirements for a small business loan. The VBF provides capital in the form of a non-interest bearing loan with very favorable repayment terms. Currently, the VBF is not taking applications, while they go through a fundraising round.

More Funding Choices

So there’s more out there than veteran business loans and grants. Veterans and non-veterans alike may qualify for:

Merchant cash advances (if their business has incoming revenues)
Crowdfunding is an option for all, but conventional businesses tend to not do so well
Veteran and non-veteran business owners can also sell equity in their business to angel investors for funding

Yet more options include collateral-based funding, business credit, and our credit line hybrid. Our credit line hybrid is a form of unsecured funding—good for both veterans and non-veterans. Get business funding without having to supply bank statements or credit stubs.

Getting a VA Small Business Loan: Takeaways

VA loans and other financing are out there. And you can get grants or even venture capital investment in your business. There are also nonprofits which give money to veteran-owned businesses. But never forget about the SBA and their programs, and programs not specific to veterans, like our credit line hybrid.

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How to Check Credit Reports for Your Business

Do You Know How to Check Credit Reports for Your Business?

If you’re a business owner, chances are it’s been on your to-do list for quite a while: check credit reports. But do you know how to do this fast?

Business owners are always short on time. Find out here how to check credit reports with efficiency.

You Need to Check Credit Reports as a Part of Building and Maintaining Business Credit

Business credit is credit which is in a business’s name. It is does not tie to owner creditworthiness. Instead, business credit scores depend on how well a company can pay its bills. Hence consumer and business credit scores can vary.

Credit Reporting Agencies

There are three large business CRAs:

Dun & Bradstreet
Experian and
Equifax

There is also the FICO SBSS business score and CreditSafe. But today, we will focus on the big three’s reports.

Check Credit Reports for Your Business

The business credit reporting agencies offer a variety of reports, at all sorts of price points. We recommend getting detailed reports. That way, you can spot errors before they get out of hand.

If a report with details isn’t in the budget right now, at least a shorter summary report will keep you in the loop. And it will keep in the habit of checking your credit reports. It’s more than a credit score check. Today, we’ll look at high level data. This is what you absolutely must know.

Dun & Bradstreet

There are over millions of companies around the world in D&B’s database. You need a D-U-N-S number to start building business credit. No D-U-N-S number? Then get one; they’re free. The main score is PAYDEX. But a business will not get a PAYDEX score, unless it has at least 3 trade lines reporting, and a D-U-N-S number. A business must have BOTH to get a D&B score or report.

Predictive Models and Scoring

D&B takes historical information to try and predict future outcomes. This is to identify the risks inherent in a future decision. They take objective and statistically derived data, rather than subjective and intuitive judgments. There are sample reports online available on the D&B website.

D&B Rating

This rating helps companies quickly assess a business’s size and composite credit appraisal. Dun & Bradstreet bases this rating on information in a company’s interim or fiscal balance sheet plus an overall evaluation of the firm’s creditworthiness. The scale runs 5A—HH. Rating Classifications show company size due to worth or equity. D&B assigns such a rating only if a company supplies a current financial statement.

The rating contains a Financial Strength Indicator. D&B calculates it using the Net Worth or Issued Capital of a company. Plus there’s a Composition Credit Appraisal. This number runs 1 through 4, and it reflects D&B’s overall rating of a business’s creditworthiness. The scores mean:

1 – High
2 – Good
3 – Fair
4 – Limited

A D&B rating might look like 3A4.

D&B PAYDEX

This part shows two gauges: an up to 24 month PAYDEX, and an up to 3 month PAYDEX. Hence you can see recent history and a firm’s performance over time.

Both gauges have the same scores:

1 means greater than 120 days slow (in paying bills)
50 means 30 days slow
80 means prompt
100 means anticipates

100 is the best PAYDEX score you can get. The PAYDEX score is Dun & Bradstreet’s dollar-weighted numerical rating of how a company has paid the bills over the past year. It reflects how well a company pays its bills.

Financial Stress Score

This section shows a Financial Stress Class, and a Financial Stress Score Percentile. The Financial Stress Class runs 1—5, with 5 being the worst score.

Financial Stress Score Percentile

This is compares to other businesses. The percentile contains a Financial Stress National Percentile. The Financial Stress National Percentile reflects the relative ranking of a company among all scorable companies in D&B’s file. It also contains a Financial Stress Score. The report indicates the probability of failure with a particular score.

Financial Stress Score Percentile Comparison

The idea behind this score is to predict the chance that a business will fail over the next 12 months. The average probability of failure compares to other businesses in D&B’s database. The Financial Stress National Percentile reflects the relative ranking of a company among all scorable companies in D&B’s file. The Financial Stress Score offers a more precise measure of the level of risk than the Financial Stress Class and Percentile. It is meant for customers using a scorecard approach to determining overall business performance.

PAYDEX Yearly Trend

The PAYDEX Yearly Trend is a graph. It includes payment history in detail, with payment habits and a payment summary. It helps show if a business pays its bigger bills first or last

D&B Business Credit Monitoring

Pricing is current to September of 2021. You can use D&B Credit Monitor to check credit reports with D&B. It costs $39/month. View recent scores and ratings, and benchmark your business versus your industry. It also alerts you to special events like suits, liens, and judgments. And it includes dark web monitoring. This scans the dark web to help protect your business from potentially fraudulent activity.

Let’s take a look at Experian.

Experian

Experian has a massive consumer and commercial database that they use to gauge risk.

“By combining personal and commercial credit information in one report, Experian provides a complete picture of the creditworthiness of small businesses.”

Their best known and most popular score is Intelliscore Plus℠, a percentile score.

Experian’s Intelliscore Plus℠

Business credit scores range 0—100. An Intelliscore Plus score of 0 represents a high risk. It reflects the percentage of businesses scoring higher or lower than the business under review.

Many large financial institutions around the world use it. So do more than half of the top 25 P&C insurers and most major telecommunications and utility firms. Industry leaders in transportation, manufacturing, and technology also use Intelliscore Plus as their main risk indicating model. It has more than 800 aggregates or factors affecting business credit scores. There are scores on millions of businesses in the Experian database.

What does Intelliscore Plus measure?

This is a highly predictive score. It provides a detailed and accurate reflection of a business’s risk. It blends commercial data and consumer data on the business owner or guarantor. Reports include information on trades, legal filings, and more.

The Experian Financial Stability Risk Score (FSR)

In an Experian business credit report, FSR predicts the potential of a business going bankrupt or defaulting on its obligations. The score identifies the highest risk businesses by making use of payment and public records which include:

Severely delinquent payments of 61+ and 91+ days
High utilization of credit lines
Tax liens
Judgments
Collection accounts
Industry risk
Short time in business, etc.

FSR shows a 1—100 percentile score, plus a 1—5 risk class. The risk class puts businesses into risk categories. The highest risk is in the lowest 10% of accounts. A score of 66—100 and a risk class of 1 means a low risk of default or bankruptcy. But a score of 1—3 and a risk class of 5 means a high risk of default or bankruptcy.

Experian Business Credit Monitoring

Experian offers monitoring services. Prices are current as of September 2021.

Business Credit Advantage: $189/year, monitor business credit for 1 year, alerts of changes
Business Credit Score Pro: $1995/year with trade details or $1495/year in summary form only, multiple business credit report access.
Profile Plus: $49.95 for a single report
Credit Score Report: $39.95 credit summary report with score.

Experian Subscription Plans: The Business Credit Advantage Subscription Plan

This is just one report including almost everything Experian offers. It includes:

Business Credit Score (Intelliscore)
Financial Stability Risk Rating
Collections and trade payment details

Experian Subscription Plans: The Business Credit Score Pro Subscription Plan

Get 30 reports per month but it’s not a free credit score. This does not include:

Alert Emails & Monitoring
Dispute Resolution Status Alerts
3-Month Score Trend
Unlimited Access to Your Report
Business Identity Monitoring

Experian also offers an enhanced version of this plan. Get more information, including:

Trade payment detail
UCC detail
Inquiry detail

Currently costs $1,495 per year. So, it is far from being a free credit report!

Experian Reports: The Profile Plus Report

Check credit reports with everything in the Business Credit Score Pro Subscription Plan, plus (optional with the more expensive report):

Trade Payment Detail
Inquiry Detail
UCC Detail
Corporate Financial Information

Experian Reports: The Credit Score Report

Get everything in the Business Credit Score Pro Subscription Plan, but no optional sections. The credit score report is like a one-time version of the Business Credit Score Pro Subscription Plan. You can use it to decide if you want to subscribe to the more expensive plan.

Let’s turn to Equifax.

Equifax and Its Data

The company gets its data from a data sharing agreement with the Small Business Exchange. It gets net 30 type industry trade credit information from a wide variety of suppliers that provide products and services to businesses on an invoice basis. Equifax combines financial data with industry trade credit data, and adds utility and telephone data. It also adds public record information (bankruptcies, judgments, and tax liens).

Credit Risk Score

In an Equifax business credit report, the Credit Risk Score runs 101—992. Higher numbers are better. This section also shows key factors, which are positives and negatives about your business. Like how old your oldest account is, and if you have any charge-offs, and the size of your business.

Payment Index

This score runs 0—100. Higher numbers are better. It also shows Industry Median. 90+ means Paid as Agreed.

Business Failure Score

The next piece is on your Business Failure Score. This score runs 1000—1880. It has its own key factors, like recent balance information.

Equifax Business Credit Monitoring

Prices are current to September 2021. Check credit reports which include credit summary, payment trends, and public records. The idea is to help you identify potential risk of late payments and business failure. Order a single Business Credit Report for $99.95. Or order a Business Credit Report multi-pack (5 for the price of 4) for $399.95.

Improving Your Business Credit Reports

Make sure vendors are reporting your payments. Always pay your bills on time. Pay them in full. Don’t close positive accounts. Try to avoid derogatories like liens.

Monitor Business Credit at D&B, Experian, and Equifax for Less

All these reports are expensive! You could spend HUNDREDS of dollars trying to keep up with reports from all three big business CRAs.

But did you know that you can get business credit monitoring for all three big business CRAs, and all in one place—for less? Credit Suite offers monitoring through its Business Finance Suite (through Nav). See what credit issuers and lenders see. So you can improve your scores and get the business credit and funding you need.

Check Credit Reports for Your Business: Takeaways

In general, the most important parts of any business credit report include:

Scores or graphs denoting risks of failure or nonpayment
Data on public records
Information on how quickly (or slowly) you pay your company’s bills

Improving reports means paying on time more than anything else. Reports can be expensive—we can help you monitor for less.

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How to Check Credit Reports for Your Business

Do You Know How to Check Credit Reports for Your Business? If you’re a business owner, chances are it’s been on your to-do list for quite a while: check credit reports. But do you know how to do this fast? Business owners are always short on time. Find out here how to check credit reports … Continue reading How to Check Credit Reports for Your Business

Why do Lenders Prefer Using a Personal Credit Score to Approve a Business Loan?

Your Personal Credit Score Can Make a Difference When You Apply for a Business Loan If you’re a small business owner, don’t assume your business credit is separate from your personal. If you apply for a loan, lenders will consider it on your personal credit, not your business credit. Your business credit score is considered … Continue reading Why do Lenders Prefer Using a Personal Credit Score to Approve a Business Loan?

How to Choose Between PayPal Loans, Square Loans, or Fundbox Loans For Your Business

It can be hard to get a business loan. This is especially true if you are applying for loans from a traditional bank. Sometimes alternative lenders are a better option. You may not realize that companies like PayPal and Square offer loan options for their customers. There are also companies, like Fundbox, that require you to be a customer with them first. These are not banks, so they are referred to as alternative lenders. How do you decide if PayPal loans, Square loans, or Fundbox loans right for your business?

Are Loans from PayPal, Square, or Fundbox Easy Business Loans?

Getting a business loan is not always easy. It can take a long time to find one that is right for your business. This is partially due to the fact the requirements vary widely between lenders. The number of requirements vary as well.

Sometimes you not only need a good credit score, but also collateral, a minimum time in business, and minimum average revenue. Not all businesses meet all of these requirements at once, making it hard to qualify.

Other Options

There are alternative lenders, however, that make things a little easier, even if they aren’t exactly easy business loans. They may have less stringent requirements or rely on things other than collateral or credit score. Fundbox, PayPal, and Square are just a few examples.

Find out why so many companies use our proven methods to get business loans.

PayPal Working Capital Loan

If you have a business account with them already, you can get PayPal loans. No personal guarantee is required, and they do not do a credit check. Instead, loan amounts and eligibility depend on your sales via the platform. The maximum loan amount depends on your account history with the company.

To be eligible, you must have a Premier or Business account with them for 90 days or more. In addition, if your account is Premium, you must have at least $20,000 in annual sales with them. If it’s a business account, you must have at least $15,000 in annual sales on the account. You also have to pay off any existing loan with them before you can get another one.

Since payments are automatically deducted as a percentage of each sale through the account, the amount you pay each day varies with your sales volume. As a result, the more you sell, the more you will pay on the loan that day.

You’ll make no payments on days without sales, but there is a minimum repayment requirement every 90 days. Depending on the loan terms you choose, you must pay at least 5% or 10% of your total loan amount (loan + the fixed fee) every 90 days.

The 5% minimum applies to loans estimated to take 12 months or more to repay, based on your business’ past sales through the company and other factors. The 10% minimum applies to loans estimated to be repaid within 12 months.

Are PayPal Loans Right for Your Business?

If your sales volume is strong enough to keep up with repayment and not put your business at risk, it could be a great funding opportunity. It’s probably not something you should open a account with them for on it’s own, but if you already have one it is definitely an option to keep in mind.

Loans from Square

You can also get loans through Square if you have a Square account. Similar to PayPal loans, applying will not affect your personal credit score. Loan eligibility is based on a variety of factors related to your business, including its payment processing volume, account history, and payment frequency.

Loan amounts range from $300—$250,000. You’ll get a customized offer based on your business’s card sales through Square. There is no interest, just an ongoing flat fee.

The fixed fee is the difference between the total amount you owe and the initial loan amount. It will never change, regardless of how quickly or slowly you repay the loan. It automatically deducts until your loan is fully paid.

Like PayPal loans, daily payments fluctuate with sales. On days with higher sales, you will pay more than on days with lower sales. You must pay a minimum of 1/18 of the initial balance every 60 days.

Square doesn’t require collateral for business loans of $75,000 or less. For loans over $75,000, they take a security interest in your business assets. They will file a UCC statement with the Secretary of State where your business is organized. There is no personal guarantee.

Is a Square Loan Right for You?

If you work with Square and need less than $75,000, you don’t even need collateral. That can be a great option. However, if you need more than $75,000, the required UCC statement may be a turn off.

Find out why so many companies use our proven methods to get business loans.

Fundbox

If you do not already work with either of the other two, Fundbox may be a better option. Cash flow financing is easy with Fundbox. They just want to know about your cash flow when deciding whether to fund your business. They will connect directly to your online accounting software, and that’s all you need to do.

Fundbox offers a revolving line of credit rather than term loans. Amounts range up to $100,000. They will auto debit your weekly payment from your bank account. The minimum personal credit score requirement is lower than that of most traditional lenders as well.

You pay in equal installments over the course of a 12 or 24 week plan. Available credit replenishes as you pay, and there is no penalty to repay early.

To qualify, your business must be based in the US and you need to have a 600+ personal FICO score. Additional requirements include:

$100,000+ in annual revenue
A business checking account
Ideally 6 months or more in business

Are Any of These a Good Option for Your Business?

That’s the real question, right? How do you know which one to choose? If you already have a relationship with PayPal or Square, and you qualify, then a Square or PayPal loan may be a good option. Unless you would prefer a line of credit, then you may want to consider Fundbox.

Find out why so many companies use our proven methods to get business loans.

Of course, if you do not have a relationship with the other two, Fundbox it is. If you aren’t already using one of the payment processing companies, the lending options alone aren’t really a reason to start. Still, they could play a factor in a decision between the two if you are considering one or the other.

Why Choose one of These Options Over Traditional Funding?

The main reason is the lower credit score requirements, or lack of credit score requirement at all. Also, the fact that collateral isn’t really an issue unless you are trying to borrow more than $75,000 from Square. These aren’t the only options however. Credit Suite has a number of funding options to fit almost any business. We can help you find the best fit for your specific needs.

The post How to Choose Between PayPal Loans, Square Loans, or Fundbox Loans For Your Business appeared first on Credit Suite.

Why do Lenders Prefer Using a Personal Credit Score to Approve a Business Loan?

Your Personal Credit Score Can Make a Difference When You Apply for a Business Loan

Solid personal credit is a necessity. The need to build and maintain it never goes away for most small company owners.

Some lenders (like banks) place more importance on personal scores. This is for checking business loan applications.

So, small business owners must focus on creating a solid business credit profile. This is along with building a good personal credit score.

What is the Difference Between Business Credit Score and Personal Credit Score?

Here are the main variations between company personal credit scores:

Business credit reports use Employer Identification Numbers (EINs). Personal credit reports use Social Security numbers (SSNs).
The ranges of personal and business credit scores are very different. Business scores tend to vary from 0 to 100. The range of personal credit scores is 300 to 850.
Experian manages both business and personal credit. They use separate databases and departments if you have both kinds of credit.
You can freeze or lock personal credit reports. But business credit reports cannot be locked or go under security freeze.
Different rules apply to data used in business and personal credit reports.
Anyone can examine your business scores (they must buy the report and scores). But only you and others who have your authorization can access your personal scores.

Demolish your funding problems with 27 killer ways to get cash for your business.

When do Lenders Consider a Personal Credit Score for Approving Business Loans?

When reviewing creditworthiness for a business loan, most lenders check personal credit history.

Your personal credit will matter more for a business loan when any (or all) of the following are true:

a. If You’re Seeking a Loan from a Bank or Other Conventional Lender

b. If Your Business is a Startup or Small in Nature

If your business score does not have enough info for lenders to check credibility, they will place a higher value on personal scores.

c. Your Personal Credit Score is Relatively Low

But too many negative items on your personal credit history may damage your score. A low personal credit score is something a lender will notice and consider as a risk.

As a business owner, understand how your credit score is calculated, and how it’s used when you apply for a credit. And understand what you should do to improve it.

Demolish your funding problems with 27 killer ways to get cash for your business.

How is a Personal Credit Score Calculated?

The Federal Government improved credit reporting quality with the Fair Credit Reporting Act in 1970.

They calculate your FICO score using this basic, widely used formula:

Payment History (35%)

Late payments, judgments, and bankruptcies are problematic. So are debt settlements, repossessions, charge-offs, and liens in your credit report. They will lower your personal credit score.

Debt Owed (30%)

Credit History (15%)

Credit Types (10%)

New Credit Accounts (10%)

How Does This Information Build Your Credit Score?

A range of factors can drive a bad credit score, including a divorce, severe illness, or loss of employment. This allows you to ensure that potential creditors are aware of the information.

Here’s what a potential creditor sees when they look at your score:

800-850 (Exceptional)

740-799 (Very Good)

670-739 (Good)

This is a good score, and many people in the United States fall into this category. With this score, a borrower can hope to have more choices and approvals from various lenders.

580-669 (Fair)

Most conventional lenders will not consider borrowers in this group for a small business loan. A personal credit score of 660 is the lowest that the SBA will typically consider.

300-579 (Very Poor)

Demolish your funding problems with 27 killer ways to get cash for your business.

How To Improve Your Personal Credit Score?

Analyze Your Score

Make Good Use of Credit

Keep credit usage to roughly 15% of your available credit limit to increase your credit score.

Make Your Payments On Time

Do Not Apply for Excess Credit

Applying for unnecessary credit reduces your credit score. So if you’re attempting to raise your score, it’s not a good idea.

Don’t Transfer Balances Too Often

Have Patience and Keep Trying

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How Business Vendor Credit Accounts Can Improve a Business Credit Portfolio

Business vendor credit accounts are not usually talked about as part of a business credit portfolio. The emphasis is generally put on credit cards, lines of credit, and loans. However, they are vitally important to the cause.

A Strong Business Credit Portfolio Can Help Move Your Business Forward

A business credit portfolio is made up of all of the credit you have available to your business.

That includes:

Loans
Lines of Credit
Credit Cards
And even business vendor credit accounts

Having a strong business credit portfolio is important for running and growing your business. It’s how you ensure you have the funding you need, available when you need it. It helps you bridge both planned and unexpected cash gaps.

Even better, it will allow you to seize opportunities to grow and scale. Better yet, you can do without creating a cash flow problem.

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit, even in a recession.

How Do You Build a Strong Business Credit Portfolio?

Some business owners just use their personal credit to get started. That’s not necessarily the best way. Most do not even realize there is another way. It actually starts with business vendor credit accounts. These are accounts with vendors that allow you to pay invoices on net terms, rather than right away.

How can net 30 vendors and and accounts with longer net terms really help? There are actually a number of ways. They not only contribute to a strong portfolio, but they can be a gateway to building an even stronger portfolio.

How Vendor Credit Accounts Contribute to a Credit Portfolio

Using net 30 vendor accounts allows you to manage cash flow. The best part is you can do so without paying interest. This is because net accounts are paid off in total at the end of the net terms. Usually that is 30, 60, 90, or 120 days.

Cash Flow Management and the Credit Portfolio

Managing cash flow is really what the business credit portfolio is all about. A strong portfolio allows you to get what you need when you need it. There is no need to use up cash reserves or wait until you have enough cash on hand.

It’s smart to use business vendor credit whenever possible. By doing so, you save the revolving credit for larger purchases or those purchases you do not have vendor credit available for.

Business Vendor Credit Helps Build Your Credit Portfolio

Here’s another way business vendor credit can improve your business credit portfolio. If you get the right accounts and use them properly, they can help you fill your credit profile with more business credit. As a result, you can rely less heavily on your personal credit.

Here’s how that works. As a new business, you will not yet have a business credit profile. There is no history of your business paying obligations, and there is no business credit score.

Since it’s virtually impossible to get credit without credit, there is a problem. Before you can build a business credit profile, you have to have initial accounts reporting.

Using Business Vendor Credit Accounts To Get Accounts Reporting

There are not many business accounts you can get without already having a business credit score. However, there are a few net 30vendors that will offer net terms on invoices without doing a credit check. We call these starter vendors.

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit, even in a recession.

That doesn’t mean they extend credit to any and all businesses. There are still factors they consider to determine creditworthiness. These vary from vendor to vendor, but can include things like:

Time in business
Business bank account
And more

Using Starter Vendors to Build a Business Credit Profile

Extending credit without a credit check is not the only thing that makes a vendor a starter vendor. The other thing that starter vendors do that sets them apart is report on-time payments to the business credit reporting agencies. This is how you start to build a business credit score.

How to Find Starter Vendors

This part is tricky for a number of reasons. Most vendors that will extend net terms will tell you whether or not they do a credit check. What they will not usually tell you is whether or not they report your payments. Many will report late or missed payments, but few report positive payment history.

You need accounts that will report positive payment history to build a business credit profile.

There are a couple of ways to find starter vendors. The first way is to apply for accounts with the vendors you already use or want to build a relationship with. If you get approval, use the account. Then, monitor your business credit report to see if they are reporting.

There are a few problems with this method. First, it is not guaranteed. There are not a lot of starter vendors out there. That means the chances that you just happen to find enough by trial-and-error are low. It takes more than one or two accounts reporting. You need a few.

This trial-and-error process can be very slow. The only way to know if it is working or not is to monitor your business credit. Unlike consumer credit monitoring, business credit monitoring is not free. Therefore, you are going to be paying to build business credit regardless. That is, unless you do not track your progress at all.

There is a Better Way

The slow progress and uncertainty of trial-and-error wastes time and can cause a lot of frustration. A better way is to start with vendors you already know are starter vendors. The key is to work with someone who has an inside track on which creditors will extend net credit without a credit check and report on-time payments.

By doing this, you can know that as you get approval and start using the credit, your business credit score is growing. Working with a business credit specialist is much faster and saves a ton of frustration. It frees you up to run your business. You don’t have to try to figure out which vendors can help build your profile.

Many times a business credit specialist can help you find less costly ways to monitor your business credit reports as well.

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit, even in a recession.

Using Vendor Business Credit Wisely

There is a chance some of the vendors you need to work with to get accounts initially reporting will not be vendors you would have otherwise chosen. They may not sell things you think you need. The thing is, most of them sell things that every business can use.

There is no need to buy a bunch of useless stuff to build business credit. You can buy packing supplies, office supplies, even janitorial supplies. Whatever you do, just be sure you pay on time, or better yet, early.

Business Vendor Credit Accounts Really Can Improve a Business Credit Portfolio

In fact, without them, it’s almost impossible to build a business credit portfolio at all. Your only option is to use a personal guarantee and collateral on virtually all accounts. While neither of these things are bad, the less you have to use them the better.

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