Building a business is often a weird mix of intentionality and luck. You have to be intentional in setting your business up for success and making decisions but sort of lucky in connecting with people, vendors and lenders who are genuinely interested in growing your business. If done correctly, vendors can play a huge part in your businesses’ financial stability and success.
Not to be confused with lines of credit, trade lines or “net” accounts help build your credit by extending the time you have to pay your purchasing order. The amount of time extended may vary between vendors; however, 30, 60 and 90 days are the most common form of net account. In order to build business credit, it’s important to partner with a vendor who consistently reports payment history to one of the major reporting bureaus.
How to Qualify
Vendors and creditors prefer working with legally established businesses that have an online presence, physical address, and online exposure. When a business is new, it’s important for the vendors to see that you take your business seriously. Having a professional email address in conjunction with a fully functioning website where they can see what products and services your business offers will help them determine whether or not you are a good candidate for a net account. Outside of the logistics, most vendors request that your business has been legally formed for 90 days and that there is a checking account in the business’s legal name to show as proof that an established business accounting system is in place.
Vendors That Help
There are a number of vendors that specifically work with small and new businesses. Some of those vendors include:
Crown Office Supplies
Strategic Network Solutions
Building business credit helps protect your personal credit and reinforces the liability protection that legal entities provide. Unforeseen business needs and opportunities come up all the time and building your business credit now will help you when you need to apply for business loans and lines of credit.