Tag: Vendors

Check Out These Tier 4 Business Credit Vendors That Can Help Strengthen Your Business Credit Score

At Credit Suite, we talk about building business credit by working through the vendor credit tiers. These tiers are how we classify vendors based on their ease of credit approval. Tier 1 vendors are likely to extend net terms based on meeting some basic Fundability guidelines. Meanwhile, Tier 4 vendors are likely to require a strong PAYDEX, among other things.

Are Tier 4 Business Credit Vendors Really Necessary?

First, not all vendors fall into tiers. Tiered vendors report payments to at least one business credit reporting agency. Vendors that do not report do not fall into a tier.  However, don’t discount them. They can still be very useful to your business.

Vendor credit as a whole is important to building a strong business credit portfolio. Still, we get questions from potential clients wondering if it is necessary to work the tiers in order.  Furthermore, is it necessary to have accounts from all the tiers?  Can you just get accounts in Tiers 1 and 2 and then stop?

It seems to some that if you have enough accounts in Tier 1 and Tier 2 to qualify for Tier 3 vendors, that should be enough. Enough for what though? Yes, you may have a decent business credit score at this point, but these accounts are not going to be enough to properly fund your business.  After all, that is the point of a strong business credit score. The goal is to qualify for as much funding as possible to run and grow your business.

Do You Have to Work Through the Business Credit Tiers in Order?

There are those out there that hold the idea that there is no need to work through the tiers. Some business owners will tell you they were able to skip straight to Tier 4 without applying for credit from vendors in tiers 1-3 first. Honestly, it’s possible.

If you have a large amount of income or want to use a personal guarantee, and if you have a long time in business, you MAY be able to get credit from Tier 4 vendors and even credit cards, without working through the other tiers.

So What’s the Point?

The whole point of the Credit Suite vendor tiers is to help our customers mix-up the “secret sauce” of business credit. Building business credit this way allows you to limit using a personal guarantee and protect your consumer credit.

It also allows for you to build your business credit portfolio and your business credit score at the same time. Even better, this way allows your business to scale and grow faster, because you can use the funding for things you need while you are building business credit.  Vendor accounts can help with a number of expenses including marketing, inventory, supplies, and more.

You do not have to incur large amounts of personal loans from the beginning.  There is no need to wait until you reach a certain point to start utilizing credit in the name of your business. Rather, you can work on building business credit and use business credit from the beginning. As you do so responsibly, you will begin to qualify for vendors that offer more money and better terms, hence the other tiers.

By continuing on with Tier 4 business credit vendors, you will have more access to what you need to run your business, expand your business credit portfolio, and continue building your business credit.

Tier 4 Business Credit Vendors

These vendors require a strong business credit score for approval, but they also report payment history to the business credit reporting agencies. Here are a few examples.

Ally Car Financing Through Credit Suite

Ally provides personal financing, but they will also report to business credit bureaus. If your business qualifies for financing without the owner’s guarantee, you can get financing in the business name only.  They  will report to Experian and Equifax.

Ally offers a Commercial Line of Credit. To qualify, you need:

  • To be an entity in good standing with the Secretary of State
  • An EIN
  • A business address- matching everywhere
  • A D-U-N-S number
  • All business licenses (if applicable)
  • A business bank account
  • Bank reference
  • Fleet financing references

If a personal guarantee is used Ally will not report to the personal credit bureaus unless the account defaults.

You can also get a lease or a loan through Ally.

To qualify, you need:

  • To be an entity in good standing with the Secretary of State
  • An EIN
  • A business address- matching everywhere
  • A D-U-N-S number
  • All business licenses (if applicable)
  • A business bank account

There is no minimum time in business requirement.

You can only apply in person, and the dealer will let you know if you are approved or if a Personal Guarantee (PG) is necessary.

Brex

Brex is a business money management system that integrates with your accounting software. It allows you to track expenses and, depending on the level of service you choose, can also help with paying bills and controlling spending.

The easiest way to use Brex for both managing finances and building business credit is to open a Brex Cash account. Brex is not a bank, but rather a banking alternative. They do have a partnership with the FDIC, so your funds are secure,

They have a couple of options, but the one that falls into Tier 4 is similar to a traditional business credit card when it comes to limits. Instead of checking your personal credit score, they base approval and credit limits on business financial information.  This may include available cash, spending patterns, and more.

If you qualify for this card, your entire balance will be paid monthly.  This makes it more like net financing, as you cannot carry a balance. Brex requires an average bank balance of $1M to qualify for net 30 terms.

Ford Commercial Vehicle Financing Through Credit Suite

Ford offers several commercial vehicle financing options. These include loans, lines, and leases to actual business entities. You can get a loan or a lease.

They may ask for a Personal Guarantee (PG) if you are not approved on the merit of your application. Ford will report to D&B, Experian, and Equifax. To qualify, you need:

  • To be an entity in good standing with Secretary of State
  • An EIN
  • A business address- matching everywhere
  • A D-U-N-S number
  • All needed business license(s)
  • A business bank account
  • Strong business credit history
  • A good Experian business credit score

Frost Bank Business Rewards Credit Card

Frost bank requires $5M annual revenue to avoid PG. Also, you have to apply in person. If you apply online a PG may be required regardless. They only offer financing to current customers, and there is no minimum time in business requirement.

Don’t Stop Building Business Credit

Business credit is something you continue to build upon and improve, not a path to a final destination. This is much like a business itself, and the two go hand in hand of course. You want your business to continue to grow and thrive indefinitely, and tier 4 business credit vendors can help with that.

The post Check Out These Tier 4 Business Credit Vendors That Can Help Strengthen Your Business Credit Score appeared first on Credit Suite.

How to Use Tier 3 Vendors to Build a Strong Business Credit Portfolio

Hitting the 5 year mark is a tremendous achievement when it comes to running a business. Especially considering that nearly half of all companies fail in their first 5 years, and about ⅔ fail in the first 10 years. Truly, your company has beaten the odds.

Tier 3 Vendors are a Gateway to a Strong Business Credit Portfolio

With half a decade under your belt, your business should be profitable. However, you may still be using your personal credit on occasion. Maybe you built initial business credit and then stopped, thinking that you were done.

For example, maybe you already have several vendors reporting from the first couple of vendor tiers. Vendors such as Uline, Quill, and Grainger are great to work with. They offer net terms with fewer requirements than most business credit cards.  Even better, they report your payment to the business credit CRAs. Working with them helps you build an initial business credit score. But you can’t stop there.

Not only do you want to keep building your business credit score, but you want to build a well-rounded business credit portfolio. This includes much more than Tier 1 and 2 vendors, and even more than business credit cards.

Here are some other factors that you need to consider when it comes to a strong business credit score and portfolio.

Tier 3 Vendors

If you stopped at tier 2, thinking you were done, you are missing out. There are a ton of tier 3 vendors that can help you run your business more smoothly and manage cash more efficiently.

These are vendors that require a longer time in business and an established business credit score. They typically like to see regular business revenue before they will offer net terms. Some even offer revolving credit similar to a credit card. They are an important part of a strong business credit profile, and they are essential to building the strongest business credit score possible.

By the time you get to Tier 3 vendors, you should have at least 6 trade accounts reporting. That’s enough to help you get approval with vendors in tier 3, but not enough to be finished. You need at least 3 of these vendors reporting, making for a total of 9 trade accounts on your business credit report.

Here are some examples.

Crown Office Supplies

You can get paper and other office supplies through Crown Office Supplies. They report payments to all three of the major business credit reporting agencies. These are Dun & Bradstreet, Experian, and Equifax. The major benefit here is that it can be hard to find vendors that report to Equifax.

To qualify, you will need:

  • To be an entity in good standing with Secretary of State
  • An EIN
  • A business address that matches everywhere
  • A D-U-N-S number
  • Business license (if applicable)
  • Business bank account

There is a membership fee of $99 annually upon approval, but payment of this fee is reported to the business credit bureaus as well.

Gempler’s

Gempler’s sells work supplies and products, such as:

  • Outdoor workwear and safety supplies
  • Pest management products
  • Tires, and footwear

They report to Dun and Bradstreet. You have to place your initial order for over $50 and select the “Invoice me” option. Then, they will pull your credit. If you’re not approved, make sure to pre-pay for your order, and keep purchasing and choosing the “invoice me” option until you’re approved for a Net 30 account.

Summa Office Supplies

Along with the large variety of office supplies, Summa also offers a number of downloadable products. They offer Net 30 terms with up to a $2000 limit. A minimum $80.00 purchase is required,for the first order only, for them to report.

To qualify a business needs:

  • To be an entity in good standing with the Secretary of State
  • An EIN
  • Business address- matching everywhere.
  • D-U-N-S number
  • Business license- if applicable
  • Business bank account

After Tier 3 Vendors, Consider Working with Nonreporting Trade Accounts

Even nonreporting trade accounts are important to a business credit portfolio. Do not neglect them. There is no need to put everything on a credit card.  Even vendors that do not report can help you get the things you need without dipping into cash reserves, while allowing you to save revolving credit for larger concerns or times when trade credit is not available.

Don’t Stop Building Your Business Credit Portfolio

What’s the goal of a strong business credit score? It’s to help you build a business credit portfolio for your business. Of course, with a strong score, you can add lines of credit and credit cards to that portfolio.  However, the vendors you use to build your score, along with other vendors, are very useful additions.  A well-rounded business credit portfolio is key to business success, and Tier 3 vendors are a bridge to get you there.

The post How to Use Tier 3 Vendors to Build a Strong Business Credit Portfolio appeared first on Credit Suite.

How to Use Tier 2 Business Credit Vendors to Survive Inflation

Tier 2 vendors can help you survive inflation. But how do you get them, and how can they help? First, you have to understand what they are.

What’s Special About Tier 2?

Tier 2 vendors are those vendors that you should qualify for accounts with after you have enough tier 1 vendors reporting. Honestly, these vendors open up a whole new range of purchasing power. Of course, tier 1 vendors are useful. After all, they sell things you can use. However, when it comes to building business credit, their main purpose is to get initial accounts reporting to begin building your business credit score.

Truly, there are more tier 2 vendors than there are tier 1. Yet, they will not approve you for credit without at least some business credit history, or a personal guarantee. By starting with tier 1 vendors, you can often avoid using a personal guarantee in tier 2.

Is a Personal Guarantee Bad?

No, it’s not necessarily bad. Still, it may not be something you want to get into. If you use a personal guarantee to get business credit, and your business cannot pay its obligations, you will be personally liable for the debt.

It’s best, if possible, to limit the use of a personal guarantee. When it comes to large, traditional business loans, you will not have a choice. A personal guarantee will almost always be required. So, when you can get funding without one, go for it.

Now, here are some examples of vendors that fall into tier 2. All vendors require the basics of a fundable foundation for approval.  This includes:

  • Entity in good standing with Secretary of State
  • EIN
  • Business address- matching everywhere
  • D-U-N-S number
  • Business license- if applicable
  • Separate, dedicated business bank account
  • Business phone number listed in 411 directory

Some vendors have additional requirements as well.

Amazon

As you know, Amazon offers online shopping for virtually anything you can imagine. Better yet, they report to Dun & Bradstreet and Equifax.

Qualification requirements are the basic elements of a fundable foundation as listed above.

For Amazon, there is no minimum time in business if you have a strong business credit history. Yet, they will pull business credit reports to make sure there is at least some established business credit history. As a result, you must have a D&B PAYDEX score of 80 or higher and a good Equifax business credit score.

A PG is not required, but it may increase the likelihood of approval if you have a young or small business and not enough business credit history.

Remember, if you work through the Business Credit Builder program, starting with tier 1 vendors, you will likely have the business credit history you need.

Brex

With Brex, you have a couple of options. The easiest way to use Brex for both managing finances and building business credit is to open a Brex cash account.

Everyone who opens a Brex cash account gets a corporate card. It works just like a debit card, as it draws from your Brex cash balance daily. However, unlike a debit card, Brex reports these payments to Dun & Bradstreet. By doing so, they help build your business credit score.

Since this card is secured by the balance in your Brex cash account, and limited to that balance, you do not have to worry about underwriting.

Alternatively, they offers a more traditional card for those who qualify. This option is not limited to the balance in your Brex cash account.  In contrast, it offers limits that will go up to 20x higher than that of a typical corporate card. Instead of checking your personal credit score, they base approval and credit limits on business financial information. This includes available cash, spending patterns, and more.

If you qualify for this card, your entire balance must be paid monthly.

Home Depot

Obviously, Home Depot provides products and services for home improvement needs. Their Commercial Revolving Charge Card offers your business payment flexibility. Even better, it also provides a boost to your business credit profile by reporting to D&B, Experian, and Equifax.

Qualifications in addition to basic fundable foundation elements listed above for Commercial Account with Pay in Full Terms:

  • At least 3 years in the business
  • Good Experian business credit score and D&B PAYDEX score of 80 or higher

Now, they do prefer to see a minimum of 2 accounts reporting. However, they will consider the merit of the overall application. Still, if there is not enough business credit history, or if you have been in business for less than 3 years, a Personal Guarantee(PG) is required.

Additional Qualifications for Commercial Revolving Charge Account:

  • No minimum time in business
  • You must have a good Experian business credit score and D&B PAYDEX score of 80 or higher
  • A Personal Guarantee (PG) is required for the revolving charge account

Quill

Quill sells a variety of goods. Generally, these include office and cleaning supplies, among other things. As for business credit building, they report to Dun & Bradstreet. At first, they may ask you to do prepaid orders of $100.00.  After they approve Net 30, a minimum purchase of $50.00 is necessary to report.

Additional qualification requirements:

  • Good D&B PAYDEX score of 80 or higher
  • At least 3-5 trade accounts reporting on D&B credit report
  • Must be an established business for 6 months

Also, new businesses or businesses with no credit history with D&B may need to prepay purchases for 3 consecutive months until Net 30 is approved.

How to Use Vendor Credit to Prepare for Inflation

Obviously, money doesn’t go as far when inflation takes hold. But, by having vendor credit available to use, you can buy things you need before prices rise, or rise further. To beat inflation, use vendor accounts to buy the things you need regularly while prices are lower, and you’ll be ahead of the game.

The post How to Use Tier 2 Business Credit Vendors to Survive Inflation appeared first on Credit Suite.

How to Build an All Star Team of Tier 1 Business Credit Vendors to Kick Off Business Credit

Do you ever feel like trying to get credit for your business is like playing a game, but you don’t know the rules?  Imagine trying to play football but having no clue how the game works. From kick off, you would be doomed to lose. The same is true with business credit. If you don’t know what rules credit providers are playing by, you may feel like it’s a losing game from the beginning.  The best way to kick off business credit is with Tier 1 business credit vendors.

Put Together a Winning Team with Tier 1 Business Credit Vendors

As with any great football program, you need great players and a great coach if you are going to win.  Credit Suite offers great coaching through the7 steps in the Business Credit Builder.  Then, once you work your way through the first couple of steps, you will have no problem recruiting a winning team of Tier 1 business credit vendors in step 3.

Learn more here and get started with building business credit with your company’s EIN and not your SSN.

What Are the First Steps?

Of course, It does you no good to have a team if you don’t have a score board or even a field to play on. So, you have to complete the first two steps to start. Step 1 is to build a fundable foundation. This is how credit providers will see that your business is legitimate and separate from you as the owner.

Here is a quick summary some of the things included in a fundable foundation:

  • Physical address where you can receive mail
  • Toll free phone number listed in the 411 directories
  • EIN
  • Incorporating as an S-corp, LLC, or corporation
  • Dedicated business bank account
  • Proper licensing
  • Business website

After that, you have to establish your business credit reports, which includes getting a D-U-N-S number from Dun & Bradstreet and making sure you are listed with the other business credit reporting agencies. Obviously, you cannot have a business credit score without a business credit report for vendors to report payments to. Establishing this “scoreboard”  is Step 2.

Step 3: Tier 1 Business Credit Vendors

This is the step where you actually start building your business credit. To win the game, you have to choose the right vendors for your team. Without established business credit, it is going to be hard to recruit. You have to go after the right ones for this stage. These are vendors in tier 1, also known as starter vendors.

These vendors lay the groundwork for building a business credit score. They can provide initial accounts that report so that you can get a  business credit score on the board. Just like a winning team is a powerful recruiting tool in football, an initial business credit score opens the possibility of approval for advanced vendor credit accounts.

What Makes a Vendor a Tier 1 Business Credit Vendor

These are usually companies that do not specialize in extending credit. Rather, they are retail businesses that may extend net terms on invoices to their customers as a courtesy. Usually they offer either 30, 60, 90 days or however many days the net terms state, to pay in full.

It’s different from a credit card because it is not revolving credit, and there is no card. They extend this type of credit to customers without depending as heavily on creditworthiness as other vendors do. That’s not to say they just give net terms to anyone. They will just take factors other than business credit into account when determining creditworthiness.

With many of them, if you complete step one and build a strong fundable foundation, you are likely to get approval.

Other Factors to Determine Creditworthiness

These vary from vendor to vendor, but some examples include:

  • Previous or current relationship with the customer
  • Time in business
  • Average balance in business bank account
  • And more

The Importance of Reporting

Vendors that extend net terms without relying solely on business credit reports are hard enough to find. However, to be a true tier 1 business credit vendor, they also have to report positive payment history to the business credit reporting agencies.

Many vendors will report negative payment experiences, but they will not report on-time payments. Unfortunately, this is the case with more than nine out of every ten vendors. As you can imagine, this is a huge problem when it comes to building business credit. You need credit to get credit, and starter vendors that report are the only way to break the cycle.  Yet, they are almost impossible to find on your own.

Why Can’t I Find Tier 1 Business Credit Vendors On My Own?

It’s not totally impossible. But, vendors do not make it easy to figure out how heavily they rely on business credit reports or whether they report payments. That only leaves you with a couple of options if you want to do it on your own.

You can apply for accounts with the vendors you already use. Since they already work with you, they may be willing to offer credit based on your relationship rather than credit history. You can also just apply for vendor accounts and hope for the best. If you monitor your business credit reports, you will be able to see if they are reporting.

Obviously this trial-and-error method has some glaring holes in it. First, there is no telling how long it will take to get approval for just one account. Then, you will not know if they are reporting until you see or don’t see it on your business credit report. You need at least 3 accounts reporting to establish a business credit score. This method takes a lot of time and causes a lot of frustration.  Not only that, you may never get where you need to be before the lack of ability to get funding shuts you down for good.

How to Find Tier 1 Business Credit Vendors

Working with someone who has an inside track on which creditors will extend net credit without a credit check, and report on-time payments, saves time and frustration. You can know you are eligible for approval before you apply. Then, as you get approval and start using the credit, you will know your business credit score is growing because you know the vendor reports.

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

Examples of Tier 1 Business Credit Vendors

While there are several such vendors in Tier 1 of the Business Credit Builder, seeing examples can help you get an idea of what’s available. Here are a few to get you started, but remember it takes more than one account reporting to move on to tier 2 vendors.

Learn more here and get started with building business credit with your company’s EIN and not your SSN.

Grainger Industrial Supply

This vendor sells hardware, power tools, pumps and more. They report to Dun and Bradstreet, and if a business doesn’t have established credit they will want to see other information like accounts payable, income statement, balance sheets, etc.

They offer net 30, 45, 60, or 90 terms, and qualification requirements include:

  • Being an entity in good standing with the applicable Secretary of State
  • Being registered with the Secretary of State (SOS) for at least 60 days
  • An EIN
  • A business address that is consistent everywhere it is listed
  • A D-U-N-S number
  • All business licenses (if applicable)
  • A business bank account

Uline

Uline sells shipping, packing and industrial supplies. They report to both Dun & Bradstreet and Experian. Before you can get approval for net terms, you MUST create an account with them. They offer net 30 terms.

Qualification requirements include:

  • Being an entity in good standing with Secretary of State
  • An EIN
  • A business address (matching everywhere)
  • D-U-N-S number
  • Business bank account
  • Business phone number listed in 411
  • A D&B PAYDEX score of 80 or better (although if you meet the other requirements you may get approval anyway)

The credit department may require a few prepaid orders before extending net terms.

Learn more here and get started with building business credit with your company’s EIN and not your SSN.

Home Depot Pro

As part of the Home Depot family, they offer facility maintenance supplies. This vendor will not accept virtual addresses. They report to Experian, and offer net 20 terms.

Qualification requirements include:

  • Being an entity in good standing with Secretary of State
  • An EIN
  • Business address (matching everywhere)
  • D-U-N-S number
  • Business license (if applicable)
  • Business bank account
  • Trade/bank references
  • There is no minimum time in business requirement

Using Tier 1 Business Credit to Prepare for the Future

Consider the following example:

A business ships items to customers on a daily basis. In fact, shipping expenses make up a significant portion of business costs. A vendor account with Uline can allow you to stock up on shipping and packing supplies now, before prices get any higher due to continuing inflation. Then, you will be able to avoid raising shipping costs for your customers for a longer period of time.

In addition, it’s no secret that supply chain problems are plaguing most everyone right now. It’s going to get worse before it gets better. Vendor credit will allow you to place orders for things now, in anticipation of the fact that it may take a bit for them to come in.

The Quickest Way to a Touchdown

Once you have a number of tier 1 business credit vendors reporting, you will be able to move on to more advanced vendors. This will allow your business to always have access to the funds it needs to grow. That’s definitely worthy of major points.

The post How to Build an All Star Team of Tier 1 Business Credit Vendors to Kick Off Business Credit appeared first on Credit Suite.

How to Use Strong Business Credit to Unlock the Power of Advanced Business Vendors

We always talk about building business credit, and how a strong business credit score can help you get funding for your business. It can help you fund your business without overloading your personal credit.  Also, it can help you reduce your need for a personal guarantee when you need business financing. Yet, there is one huge benefit to strong business credit that is rarely mentioned. That is access to advanced business vendors.

Advanced Business Vendors are One of the Real Benefits of Business Credit

There is a misconception among many business owners that are just starting to understand business credit.  It is that a good business credit score can help you get a business loan without a personal guarantee. However, the truth is, pretty much every small business loan from a traditional lender will require a personal guarantee.

That being the case, is it really necessary to build business credit? Wouldn’t it be better to work on personal credit so a lender will accept your personal guarantee? What is business credit good for if not to help you get a business loan?

What frustrates you the most about funding your business? Check out how our free guide can help.

First, it can help you get a business loan. If your personal credit isn’t great and you have good business credit, underwriters will see that as a positive. Also, good business credit can help reduce the reliance of lenders on a personal guarantee, even if it doesn’t go away completely.

But the real benefit of business credit is that it allows you to access advanced business vendors.

What are Advanced Business Vendors?

These are vendors that offer credit to businesses that have strong business credit, but they may not report your payments.  That means they don’t help build your business credit score. Still, they are pivotal to running a thriving business.

Unlocking access to these vendors is a little realized benefit of a strong business credit score. If you have access to credit with advanced vendors you can grow your business in ways you may have never imagined

For example, you can bid on the big project even if you don’t have the cash flow to buy the supplies. You can offer the latest new product despite not having cash flow to keep up with demand. Basically, it opens up a whole new world as far as what you can and cannot do in your business.

What Does This Look Like Practically?

It may be hard to wrap your mind around exactly what this looks like in real life.  Especially when you are just thinking about credit cards and business loans.  Some examples may help.

Example 1: Remodeling Contractor Needs Supplies Before Payment

Suppose a contractor is hired to remodel a kitchen. The supplies are going to cost money, but the client isn’t going to pay until the job is done. However, if the contractor has business credit with advanced vendors to purchase the supplies, he or she can still take the job.  They will pay suppliers when the customer pays.

Example 2: Restaurant Owner Must Keep Up With Customer Demand

A restaurant owner needs to keep up with customer demand. Dishwashers are not keeping up, and they need more utensils and serving dishes. A vendor account with a restaurant supplier makes this a non-issue.  Just purchase what you need now, and pay the next month when meeting the increased demand pays off.

Example 3: Music Teacher Needs to Provide Various Instruments to Beginner Students

A music teacher has a studio to offer lessons to children.  As beginners, many of them do not have an instrument at first,  They likely do not even know what they want to play.  Business credit accounts with instrument suppliers, as well as suppliers of those things needed to maintain instruments can help. They will allow the teacher to provide a number of various types of instruments for students to try.

Students may even purchase instruments from the school once they choose what they want to play. This may offer an incentive to choose lessons at that specific school, as parents will not be spending on an instrument that may or may not get played.

Each example shows how advanced business vendors can help a business grow in a way that would not be possible otherwise. Of course, business credit cards may work. However, with vendors you usually have net terms. That means you cannot carry a balance, which reduces the risk of racking up huge amounts of debt.  Accounts like this are the reason you work to build strong business credit.

What frustrates you the most about funding your business? Check out how our free guide can help.

How To Find Advanced Business Vendors

Not all suppliers will offer this type of credit. The ones that do don’t necessarily advertise it. You typically have to know to ask for it or develop a relationship with them first.  This can take a lot of time.

Luckily, you can speed up the process by working with someone who knows who these vendors are. You need someone who already has a relationship with the vendors.  They can help you find the ones that will work best with your business. Of course, whoever you are working with has to know and understand your business as well.  Then, they will  know which vendors you will qualify for advanced business credit with.

The Benefit of the Credit Suite Business Credit Builder

This is a little known benefit of the Credit Suite Business Credit Builder. You have access to the platform for 5 years!  So, after you work through the business credit building process, you still have access to our huge database of advanced business vendors.

Furthermore, we tell you just what is required to get approved with each one. Of course, there are too many vendors to list in one presentation.  Still, a little taste of what is available can help you see that advanced vendors are just what you need.

Then you can run your business the way you need to.

Access Hardware Supply

Access Hardware Supply is a leading wholesale distributor of products from the top names in door hardware and security technology.

Qualification requirements include:

  • Entity in good standing with Secretary of State
  • EIN
  • Business address- matching everywhere
  • D & B number
  • Business License- if applicable
  • Business Bank account
  • Bank reference
  • Trade references
  • A good Experian business credit score

There is no minimum time in business necessary, and terms are net 30, 60, or 90. You can apply online or on the phone.

Central Restaurant Products

Central Restaurant Products has beens selling pretty much anything needed for the food service industry since 1981.

Qualification requirements include:

  • Entity in good standing with Secretary of State
  • Business credit history
  • EIN
  • Business address- matching everywhere.
  • D&B number
  • Business License- if applicable
  • Business Bank account
  • Bank reference
  • Trade/credit references
  • At least 1 year in business
  • D&B paydex score of 80 or higher

Terms are Net 30.

Sherwin Williams

Sherwin Williams is a widely known provider of paint and coatings for over 150 years.

Qualification requirements include:

  • Entity in good standing with Secretary of State
  • EIN number with IRS
  • Business address- matching everywhere
  • D&B number
  • Business License- if applicable
  • Business Bank account
  • 3 Trade references

If there is not enough business credit history, a personal guarantee (PG) is required. You have to apply for the account in the store, and terms are net 20.

Personal Guarantee

Sherwin Williams is a great example of how business credit can help your business, and help you avoid a personal guarantee in some instances. If you give a personal guarantee, the account may show up on your personal credit report. However, without a personal guarantee, using your business information, that is likely not to be the case.

Remember, a personal guarantee isn’t a bad thing. In fact, it may be the only option you have to get the funding you need until you build strong business credit. At least, that is, if you have good personal credit and you want to avoid very high interest rates.

But not using a personal guarantee keeps your personal credit available for personal financial needs.

Trade References

You may also notice that each of these vendors requires trade references. A trade reference is a report that details the payment history between a company and a vendor. It can come verbally, in a letter, or on a business credit report. Vendors that do not report to the business credit reporting agencies may be willing to provide a trade reference.  As a result, they can still help you get funding.

What frustrates you the most about funding your business? Check out how our free guide can help.

Unlock the Power of Advanced Business Vendors

Access to advanced business vendors is a huge benefit of strong business credit. They offer funding to help you build and grow your business, without paying unnecessary interest. They also help you avoid the temptation of carrying a large balance unnecessarily.

Of course, you have to manage the vendors in your credit portfolio carefully. Be sure you can repay and do so on time. Even if they do not report positive payment history, they are likely to report negative payment history.  Plus, you want to keep a good relationship with them. Not to mention, if you do not pay responsibly, you will not be able to get good trade references from them.

Ready to get started business business credit and unlock the power of advanced business vendors?  Try a free consultation with a business credit specialist.

The post How to Use Strong Business Credit to Unlock the Power of Advanced Business Vendors appeared first on Credit Suite.

The Surprise that Makes Recommended Vendors for Business Credit Different

When we talk about recommended vendors for business credit, there are several questions that pop up. First, what exactly do we mean by vendors? Then, what makes some vendors recommended for business credit, and others not?  After that, who are these recommended vendors and how do you find them?  Let’s find out.

What Do We Mean by Vendors

This is probably the best place to start. When using the term “credit from vendors,” we are talking about credit from companies that are not financial in nature, like banks and other credit unions. Rather, their focus is on retail, and they extend net terms on invoices to customers as a courtesy.

This means customers have either 30, 60, 90, or however many days the net terms state to pay in full.  It’s different from a credit card because it is not revolving credit.  So, when we talk about vendors, this is not a card that you apply for. This is a retail company that sells products you can use in your business, then you do not have to pay the invoice immediately.

Learn more here and get started with building business credit with your company’s EIN and not your SSN.

What are Vendors for Business Credit?

Don’t a lot of vendors offer net terms?  What makes them so special? Well, there is a small subset of vendors that we call starter vendors. Starter vendors do two things that not a lot of vendors do.

First, they will extend net terms to your business without a credit check.  That’s not to say that they do not have standards. They will not give net terms to just anyone. However, they will consider other factors besides credit score.  For example, they may take into consideration:

  • Current relationship with the customer
  • Time in business
  • Average balance in business bank account
  • Annual income
  • And more

But that’s not all.  Getting net terms without a credit check is great, but it does nothing to build your business credit score if the payments do not show up on your business credit report. True starter vendors will also report the payment you make to the business credit reporting agencies.  Again, doesn’t sound like a big deal, right? That changes when you realize that only 7% of companies that extend credit of any type to businesses report positive payment history to business credit reports.  A lot more will report negative payment history, but that does not help build a strong business credit score.

Finding Vendors for Business Credit

Vendors do not typically make it obvious if they report or who they report to. If you call, you may or may not get to talk to the right person to ask. You’ll likely be on hold for a long time, and once you get to someone they may or may not tell you.

One option is to just apply for vendor accounts and hope you get approval. Then monitor your business credit report to see if they are reporting. However, this trial and error method will take a lot of time and will likely cause a serious amount of frustration

It will take away from you doing what you need to be doing, which is running your business. Yet, it doesn’t have to be this way. There is a better option. A business credit specialist can help you find vendors that you qualify for, and that will report your on-time payment, not just late or missed payments.

They know who to talk to, what questions to ask, and the language to use to get the answers you need. This alone saves you a huge amount of time and frustration.   You not only avoid applying for accounts that you do not yet qualify for, but you also find those accounts that will actually help you build your business credit score.

Our business credit specialists have a list of starter vendors that they already work with. This list is always changing, as vendors and lenders are always changing their policies.

Also, it takes more than 3 or 4 vendors to build a strong enough score to move on to the next level of credit. Our specialists work with many vendors that can help you get things going. Here is a sample of some recommended vendors for business credit.

Learn more here and get started with building business credit with your company’s EIN and not your SSN.

Grainger Industrial Supply

One of the first vendors for business credit business owners find out about is Grainger.  They sell hardware, power tools, pumps and more. They also do fleet maintenance, and they report to Dun and Bradstreet. If a business doesn’t have a credit score already,they will want to see additional documents like accounts payable, income statement, balance sheet, etc.

To qualify, you need:

  • To be an entity in good standing with Secretary of State
  • EIN number with IRS
  • Business address (matching everywhere)
  • D-U-N-S number
  • Business License (if applicable)
  • Separate, dedicated business bank account
  • To be registered to Secretary of State (SOS) for at least 60 days

Marathon

Marathon Petroleum Company provides transportation fuels, asphalt, and specialty products throughout the United States. The products support commercial and industrial, as well as retail operations. They report to Experiand and  Dun & Bradstreet.

To qualify, you need:

  • To be in good standing with the Secretary of State
  • An EIN number with IRS
  • A Business address- matching everywhere.
  • D-U-N-S number
  • Business license (if applicable)
  • A business bank account
  • Business phone number listed on 411

Your SSN is required for informational purposes only. You can give a $500 deposit instead of using a personal guarantee, if you have been in business less than a year.

Supply Works

Supply Works is a part of Home Depot. They offer facility maintenance supplies. It’s important to know that they do not accept virtual addresses, so you will need to use your home address if you do not have a brick and mortar location. They report to Experian.

To qualify, you need:

  • To be in good standing with Secretary of State
  • EIN number with IRS
  • Business address (matching everywhere)
  • D-U-N-S number
  • Business License (if applicable)
  • Business Bank account
  • Trade/Bank references
  • There is no minimal time in business requirement

Learn more here and get started with building business credit with your company’s EIN and not your SSN.

Beyond Recommended Vendors for Business Credit: What’s Next

These vendors are great for getting started with building a business credit score. However, a good business credit specialist won’t stop there. They can guide you to a system that will help you through the business credit building process, from establishing your business credit profile to finding initial accounts, all the way through knowing which accounts to apply for next that you actually qualify to get.

For example, once you have your established business credit profile and have some initial accounts reporting, you may think you are done.  Those reported payments start building your credit score, and all you have to do is keep paying.  That’s not quite how it works.

First, there aren’t that many starter vendors out there. You are going to need credit from someone else eventually.  But, applying for accounts before your business credit profile is ready for them wastes more time, more money, and causes more frustration.

For example, some retailers will extend revolving credit rather than net terms after you have 5 or more initial accounts reporting. Some need to see a longer and larger credit history.  A business credit specialist can help you with a program to guide you in knowing which accounts you’re ready to apply for, and when.

How to Use Vendors for Business Credit Wisely

Here’s the thing, it’s not all about business credit when it comes to vendors.  For a well rounded credit portfolio, you are going to need to use all vendor accounts wisely.  You may need credit with a vendor that does not report.  But, to get approval, you’ll need to have a strong business credit profile.

You also need to use all vendor credit wisely.  When you are working toward building business credit, you are limited on which vendor accounts you can get approval for. Then, you are even further limited on which vendors will help you build your business credit score.

But do not make the mistake of thinking that means you need to buy things you don’t need because these are the only vendors you can get that will help your score. Use these vendors to purchase general items all businesses need, just until you get to the point you need to be. They may or may not offer products specifically for your business type. But, they most will offer fuel, office supplies, cleaning products and more. These are things all businesses can use.

Advanced Vendors

Building business credit is the goal, and starter vendors are a necessary part of that. Still, the end game is building and growing your business. A strong business credit profile is one tool to help you do that.  It’s job is to  help you get credit with any vendor you need, whether they report or not.  We call these advanced vendors.

Consider this example. Imagine you need to buy inventory for your business. However, your cash flow isn’t yet where it needs to be. Using an inventory supplier that will extend net terms will allow you to purchase the inventory you need. You can pay the vendor after you sell the inventory. This is just one very general example, but you get the point.

Recommended Vendors for Business Credit Are Important, But So Are Other Vendors

Both types of vendors, reporting and non reporting, are necessary for building and running a strong business.

In fact, there are a lot of vendors out there that many do not even know offer business accounts. They can help your business grow and thrive, but you have to know they exist. This is another way a business credit expert can help you save a lot of time and frustration.

A good business credit specialist will help you access the vendors your business needs to grow. They can help you determine when you qualify for these vendors, and guide you in the right direction so that you reach the required qualifications as quickly as possible. Because when it comes to running your business and managing cash flow, there is no time to waste.

The post The Surprise that Makes Recommended Vendors for Business Credit Different appeared first on Credit Suite.

Establish and Maintain Rock-Solid Business Credit When You Have No Business Credit. Check Out 3 Well-Known Starter Vendors for Business Credit That Will Happily Extend Credit to New and Established Businesses

Building The Perfect Business Credit Portfolio with Starter Vendors for Business Credit

A perfect business credit portfolio means working with starter vendors for business credit. Starting with vendor credit accounts is a proven way to start building business credit. But we don’t include vendors just because they report to the business credit reporting agencies. We include them and we talk about them because they have quality products that you can use, and great customer service. They are not just a means to an end!

Vendor Credit Cards

Vendor credit cards will kick off business credit building for your business. First, add payment experiences from three vendors. Then they must report to business CRAs like Dun & Bradstreet. And then you can start qualifying for store credit, and fleet credit as well. Make sure business credit cards don’t report on your personal credit.

Every step and every credit provider works to help your business. The idea is to help you qualify for business credit cards that you will actually use. This isn’t building for the sake of building, and it isn’t just to increase a number. These credit providers are going to have what your business needs to succeed.

Business Credit with Starter Vendors for Business Credit

Keep in mind, business credit is independent of personal. Applying for it won’t harm your personal credit scores. Building this asset can only help your business. You can help your future business right now.

Business credit doesn’t just happen. You have to actively build it. It all starts with starter vendors. They will approve your business for credit with little fuss.

Use your credit. Pay on time, just like you should with personal credit. These vendors will report to the business credit reporting agencies. And you’ll build a good business credit score.

How to Build Business Credit

Having an EIN doesn’t mean you have established credit. If you go to a bank to try and get bank credit cards using your EIN with no credit established, you’ll get denials. That is unless you have good personal credit and use it to get approvals while supplying your personal guarantee. But it doesn’t have to be that way.

You can’t start with high limits. First you must build starter trade lines that report (vendor credit). Then you’ll have an established credit profile. Then you’ll get a business credit score. With an established business credit profile and score you can start getting high credit limits.

Establish business credit fast with our research-backed guide to 12 business credit cards and lines

What is Starter Vendor Credit?

These trade lines are creditors who will give you initial credit when you have none now. These vendors typically offer terms such as Net 30, instead of revolving. So if you get approval for $1,000 in vendor credit and use it all, you must pay that money back in a set term. That is, within 30 days on a Net 30 account. But there are some revolving accounts which we still consider to be starter vendors.

You must pay net 30 accounts in full within 30 days. And you must pay net 60 accounts in full within 60 days. Unlike with revolving accounts, you have a set time when you must pay back what you borrowed or the credit you used.

Getting Started

To start your business credit profile the RIGHT way, get approval for vendor accounts that report to business CRAs. Once accomplished, you can then use the credit. Pay back what you used, and the account is on report to Dun & Bradstreet, Experian, or Equifax.

Once reported, then you have trade lines, an established credit profile, and an established credit score. Using a newly established business credit profile and score, you can then get approval for more credit under your EIN. For vendor credit, you can leave your SSN off the application. Then the credit issuer then pulls your EIN credit, sees a solid profile and score. They can then approve you for more credit.

Building Business Credit – What You Really Need to Know

Not ALL retailers will approve you just because of your credit profile and score. Some sources can also have a time in business requirement. You may need to be in business 1-3 years to get credit not requiring a personal guarantee. Some sources might require you meet certain revenue requirements for as well. But many starter vendors will approve you without these requirements.

But Keep in Mind

You won’t get a Visa or a MasterCard (bank credit cards) right away. And you need to have credit to get more credit. You need to start building trade lines to get the big payoff. Getting initial credit is the hardest part. Over 97% of trade vendors who issue credit don’t report it to the business reporting agencies. So, you MUST find sources which actually report. 

Establish business credit fast with our research-backed guide to 12 business credit cards and lines.

There are Benefits to Starter Vendors for Business Credit

Vendor credit is an important step in building business credit. Vendor credit is easier to get than retail or fleet credit. It can lead to more retail and fleet credit. Establishing credit will lead to lenders approving you.  And best of all, this process is PROVEN to work! Just like for all credit, be responsible and pay on time.

More Benefits of Starter Vendors for Business Credit

You MUST have 3 or more vendor accounts reporting to move onto retail credit, and more are even better. It will take 30-90 days for those accounts to report. It’s 60 days on average. Do NOT apply for retail credit without having 3 or more accounts first.

Getting Starter Vendors for Business Credit to Pull Credit Under your EIN

There is no Social Security requirement for starter vendor credit. This is unlike bank loans and bank cards. So leave the field blank. Don’t fill in any other number, as that’s a violation of two Federal laws. A blank field will force them to pull your business credit under your EIN. Also, if there is a credit check, then it is perfectly permissible to provide the company’s EIN. You can use an EIN, rather than your Social Security Number and date of birth.

Using Business Credit

Check out FOUR of our favorite starter vendors for business credit:

  • Grainger
  • Uline
  • Marathon
  • Supply Works

Grainger Industrial Supply

They sell hardware, power tools, pumps and more. They also do fleet maintenance

Grainger will report to Dun and Bradstreet. If a business doesn’t have established credit, they will want to see more documents. These include accounts payable, income statement, balance sheets, etc. Terms are Net 30, Net 45, Net 60, or Net 90.

Qualifying for Grainger Industrial Supply

You need:

  • Entity in good standing with Secretary of State
  • EIN number with IRS
  • Business address (matching everywhere)
  • D-U-N-S number
  • Business License (if applicable)
  • Business Bank account
  • And your business must be registered to Secretary of State (SOS) for at least 60 days

Apply online or over the phone.

Uline 

They sell shipping, packing and industrial supplies. They report to Dun & Bradstreet and Experian. You MUST create an account with Uline before starting to build business credit with them. Terms are Net 30.

Qualifying for Uline 

You need:

  • Entity in good standing with Secretary of State
  • EIN number with IRS
  • Business address (matching everywhere)
  • D-U-N-S number
  • Business License (if applicable)
  • Business Bank account
  • And a business phone number listed in 411
  • You must have a D&B PAYDEX score of 80 or better

Application may get approval for net 30 at time of order. Upon final review, Credit Department may change to a few prepaid orders, before granting Net 30.

Establish business credit fast with our research-backed guide to 12 business credit cards and lines.

Marathon

Marathon Petroleum Company provides transportation fuels, asphalt, and specialty products throughout the United States. Their product line supports commercial, industrial, and retail operations. This card reports to Dun & Bradstreet and Experian. Before applying for more than one account with WEX Fleet cards, make sure to have enough time between applying. This is so they don’t red-flag your account for fraud.

Qualifying for Marathon

You need:

  • Entity in good standing with Secretary of State
  • EIN number with IRS
  • Business address- matching everywhere.
  • D-U-N-S number
  • Business license (if applicable)
  • And a business bank account
  • Business phone number listed on 411

Your SSN is necessary for informational purposes. If concerned they will pull your personal credit talk to their credit department before applying. You can give a $500 deposit instead of using a personal guarantee, if in business less than a year. Apply online or over the phone. Terms are Net 15.

Supply Works

Supply Works is a part of Home Depot. They offer integrated facility maintenance supplies. But they will not accept virtual addresses. They will report to Experian. Terms are Net 30. Apply online or over the phone.

Qualifying for Supply Works

You need:

  • Entity in good standing with Secretary of State
  • EIN number with IRS
  • Business address (matching everywhere)
  • D-U-N-S number
  • Business License (if applicable)
  • Business Bank account
  • Trade/Bank references
  • There is no minimal time in business requirement

Extra BONUS Vendor: Wex Fleet

They report to Experian and D&B. They offer universal fleet cards, heavy truck cards, and universally accepted business fleet cards. Their cards have features supporting a small business. This includes a rewards program. Before applying for more than one account with WEX Fleet cards, make sure to have enough time between applying. This is so they don’t red flag your account for fraud.

If you don’t get an approval on the basis of business credit history, or been in business 1 year, then a $500 deposit is necessary or a Personal Guarantee. You can apply online or over the phone. Terms are  Net 15 (Wex Fleet Card), Net 22, or revolving (Wex FlexCard).

Qualifying for Wex Fleet

You need:

  • Entity in good standing with Secretary of State
  • EIN number with IRS
  • Business address (matching everywhere)
  • D-U-N-S number
  • Business License (if applicable)
  • Business Bank account
  • And a Business Phone Number Listed in 411

Starter Vendors for Business Credit: Takeaways

Starter vendors are a PROVEN way to get the business credit ball rolling. They will approve you with minimal fuss. Certain requirements repeat. These include needing to have EIN and D-U-N-S numbers. And having proper licensing (if your industry requires that). Hence getting those details squared away is a smart step to take first. Want more help with building business credit? Ask us how we can help you – including our access to literally HUNDREDS of vendors. Let’s take the next steps together

The post Establish and Maintain Rock-Solid Business Credit When You Have No Business Credit. Check Out 3 Well-Known Starter Vendors for Business Credit That Will Happily Extend Credit to New and Established Businesses appeared first on Credit Suite.

Why You Need Vendors to Build Business Credit

Building business credit is not like building personal credit.  When building personal credit, you simply do the things you do every day and your credit score builds passively.  You do not have to do anything special to start or build personal credit. You can just open accounts, make purchases, pay them off, and your score builds from there. Business credit is different however.  You have to actively work at it, and it takes vendors to build business credit. 

How to Use Vendors to Build Business Credit and Other Steps in the Process

Building business credit is a process. There are many steps in the process.  Using vendors to build business credit is actually one of the last steps. There are many steps you will need to take to ensure you can properly use vendors to build business credit.  

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit. 

The First Steps in the Process: Business Credit as Part of Overall Fundability

You absolutely cannot start to use vendors to build business credit if your business does not have a foundation of fundability.  Here’s why. Vendors will report to the business credit reporting agencies, but those agencies will not be able to tell you from your business.  Wondering how you ensure your business is set up to be fundable? We’ll tell you.

How to Build a Fundable Foundation for Your Business 

A small business has to be fundable to lenders and merchants. The first step in this process, the one that allows vendors to report payments to your business credit report rather than your personal credit, is to separate your business from yourself.  The business needs to be recognizable as an entity separate from the owner, and thus have financial transactions that are not related to the owner’s personal finances. Here is how you start. 

Get Separate Contact Information

First, you have to ensure your business has its own phone number, fax number, and address.   Now don’t panic.  That doesn’t mean you have to get a separate phone line, or even a separate location. You can still run your business from your home or on your computer if that is what you want.  You do not even have to have a fax machine.   

In fact, you can get a business phone number and fax number pretty easily that will work over the internet instead of phone lines.  In addition, the phone number will forward to any phone you want it too so you can simply use your personal cell phone or landline if you want.  Whenever someone calls your business number it will ring straight to you. 

Faxes can be sent to an online fax service, if anyone ever happens to actually fax you.  This part may seem outdated, but it does help your business appear legitimate to lenders. 

You can use a virtual office for a business address. How do you get a virtual office?  What is that?  It’s not what you may think.  This is a business that offers a physical address for a fee, and sometimes they even offer mail service and live receptionist services.  In addition, there are some that offer meeting spaces for those times you may need to meet a client or customer in person. 

You will also need a separate email address. Make sure it has the same URL as your business website.  It shouldn’t be from a free service. 

Get an EIN

The next thing you need to do is get an EIN for your business.  This is an identifying number for your business that works in a way similar to how your SSN works for you personally.  Some business owners used their SSN for their business. This is what a lot of sole proprietors and partnerships do.  However, it really doesn’t look professional to lenders, and it can cause your personal and business credit to get all mixed up.  When you are looking to increase fundability, you need to apply for and use an EIN.  Get one for free from the IRS.

You Have to Incorporate

This is the most important step in fundability thus far.  Incorporating your business as an LLC, S-corp, or corporation is essential.  It lends credence to your business as one that is legitimate. It also offers some protection from liability. For business credit building, it is a necessary step in separating your business from yourself.

Which option you choose does not matter as much building credit as it does for your budget and needs for liability protection.  The best thing to do is talk to your attorney or a tax professional.  What is going to happen is that you are going to lose the time in business that you have.  When you incorporate, you become a new entity. You basically have to start over. You’ll also lose any positive payment history you may have accumulated as well. 

This is why you have to incorporate as soon as possible.  Not only is it necessary for fundability and for building business credit, but so is time in business.  The longer you have been in business the more fundable you appear to be.  That starts on the date of incorporation, regardless of when you actually started doing business. 

Open a Business Bank Account

You have to open a separate, dedicated business bank account.  There are a few reasons for this.  First, it will help you keep track of business finances.  It will also help you keep them separate from personal finances for tax purposes. 

There’s more to it however.  There are several types of funding you cannot get without a business bank account.  Many lenders and credit cards want to see one with a minimum average balance.  In addition, you cannot get a merchant account without a business account at a bank. That means, you cannot take credit card payments.  Studies show consumers tend to spend more when they can pay by credit card.

Lastly, many of the best vendors to build business credit require you to have a business bank account before they will extend credit. 

Due to this fact, a small business needs a professional-looking website and email address. And it needs to have site hosting you actually pay for.  A free hosting service looks unprofessional. 

Get a D-U-N-S Number

You will also have to get a D-U-N-S Number from Dun & Bradstreet.  It’s free and easy to do on their website, but beware.  They will try to sell you other services you do not need.  The number is free. You definitely need it to use vendors to build business credit.  Without it, you will not have a business credit profile with Dun & Bradstreet.  Since they are the largest and most commonly used business CRA, you need a profile with them.

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit. 

The Need Credit to Get Credit Cyclevendors to build business credit Credit Suite

Here is why you need vendors to build business credit.  There is a vicious cycle in which you have to have credit to get credit.  Most lenders and credit issuers will not extend credit if you do not have a good business credit score.  However, there are certain vendors, known as starter vendors, that will extend credit without even doing a credit check. They break this cycle. Still, they do reduce their risk in other ways.  You need to know what they look for.

The Vendor Credit Tier

These vendors that do not check credit are in what we like to call the Vendor Credit Tier.  We recognize 4 tiers in the business credit building process, and the vendor credit tier is where you will find vendors to build business credit.  Typically, they offer net terms on invoices rather than revolving credit. This means, if you get an approval for $1,000 in vendor credit and use all of it, you must pay that money back in a set term, such as within 30 days on a Net 30 account.

 Then, after you make payment, they will report your payment to the business credit reporting agencies. 

There are a few such vendors out there.  Here are some options to help get you started. 

Examples of Vendors to Build Business Credit: Some of Our Top Picks

Not every vendor can help in the same way true starter credit can. These are vendors that grant an approval with negligible effort. You also need them to be reporting to one or more of the big three CRAs.  These are Dun & Bradstreet, Equifax, and Experian.

Uline is One of Our Favorite Vendors to Build Business Credit

Uline sells shipping, packing, and industrial supplies.  Also, they report to Dun & Bradstreet. This means you must have a D-U-N-S number. 

In addition, they ask for 2 references and a bank reference. The first few orders might need to be paid in advance to get approval for Net 30 terms.

Quill

Quill is another true starter vendor. They sell office, packaging, and cleaning supplies.  They report to D&B and Experian.

Since Quill reports to two separate credit reporting agencies, you get two credit experiences with them. Place an initial order first unless you already have a D&B score.

Generally, they put you on a 90-day prepayment schedule. If you order items each month for 3 months, they usually approve you for a Net 30 Account.

Grainger Industrial Supply

Grainger Industrial Supply is likewise a true starter vendor. They sell safety equipment, plumbing supplies, and more.  Like Uline, they report to D&B. To qualify, you must have a business license, EIN, and of course a D-U-N-S number. 

For under a $1000 credit limit they approve almost anybody with a business license.

You need 5 to 8 of these types of accounts to move onto the next step, which is the retail credit tier. 

Existing Accounts that Do Not Report

Be sure to check with any vendors you already do business with and ask if they will extend net terms or vendor credit of some sort and report to the business CRAs.  They do not have to, but they might since they already have a relationship with you. 

Likewise, ask your landlord and utilities companies if they will report your payments to them.  Again, they are under no obligation to do so. However, if you ask them, they just might do it. If they do, this will only build your business credit faster. 

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit. 

The Rest of the Story 

Once there are 5 to 8 or more vendor trade accounts reporting to at least one of the CRAs, then progress to the retail credit tier. These are companies like Office Depot and Staples. They offer revolving credit only to be used in their own store or website. 

After there are 8 or 10 of these types of account reporting, you can move to the fleet credit tier. These are service providers like BP and Conoco. Use this credit to buy fuel, and to repair, and take care of vehicles. Only use your Social Security Number and date of birth on these applications for verification purposes. For credit checks and guarantees, make certain to apply using the company’s EIN.

If you have been responsibly managing the credit you’ve gotten up to this point, you can start to apply for credit in the cash credit tier. These are companies that extend credit not limited by location or type of purchase.  Typically, these accounts have higher limits, better interest rates, and sometimes they even offer rewards!

Vendors to Build Business Credit and Business Credit Monitoring

It is important that you monitor your business credit for many reasons.  However, when you are using vendors to build business credit it is even more important.  This is how you will keep up with which vendors are reporting. Then, you can know when your score may be strong enough to move on to the next credit tier. 

Furthermore, you will be able to keep an eye on the overall health of your credit score and catch any mistakes that may pop up. 

Be Sure to Choose the Right Vendors to Build Business Credit

Like I said before, not all vendors will work to build business credit.  Not only do they have to extend credit relatively easily without a credit check, but they also have to report your payments to the proper agencies.  We’ve provided you with a list of a few to start with, and there are more vendors to build business credit out there. Do you research and find the ones that work best for your situation.  

The post Why You Need Vendors to Build Business Credit appeared first on Credit Suite.