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.

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