Start Building Business Credit

You can start building business credit rather quickly by applying for vendor credit lines. There are companies that are willing to extend credit to your business with no personal credit check or guarantee. Even if your company has no credit history you can get approved but expect limited terms and low credit limits initially.

The benefit to building business credit using vendor credit lines is that it will provide your business with thousands of dollars in products it needs and allow it to pay the invoices at a later date. This helps you conserve cash flow for more critical short term needs your business may have.

Another benefit is vendors report your positive payment experience to the business credit bureaus. The more vendors you establish credit lines and payment experience with the stronger the business credit profile you will build. This alone can positively impact the size of the credit limit recommendation for your business which is determined by the business credit bureaus and publicly disclosed on your file.

However, one of the biggest mistakes made by small business owners is assuming that every vendor reports their payment history. Currently there are over 500,000 vendors who extend lines of credit to businesses but less than 6,000 report your payment experience.

So when you start building your business credit file you want to be sure to select vendors that report. You can verify this by inquiring with a vendor that you plan to apply with. Be sure to ask what business credit agency they report to and how often they report.

One of my favorite aspects to vendor credit lines is the minimal qualifications required for approval. In many cases an application only requires your business contact information, Federal Tax ID#, Dun & Bradstreet#, authorized name and signature and not your social security number or personal guarantee.

The specific vendors requesting only this information will pull a business credit report to base their approval which makes obtaining vendor credit lines much easier and more convenient compared to credit cards or loans. A prime example of one of these types of vendors is a company called Quill.

Quill offers a net 30 account and reports to Dun and Bradstreet.  Best of all they report your payment history every 30 days. For small orders you can start building business credit if your business has a listing on the 411 directories and a working website. New businesses can start out with smaller limits that will increase when you pay on time every month.

I also encourage every one of my client’s to join my Business Credit Insider’s Circle. As a member they gain access to all the information, sources, videos, audios, and content not available to the general public. In addition each month we report their membership payments to Dun and Bradstreet!

As you can see vendor credit provides a way to showcase your business’s ability to properly handle its financial obligations, face scrutiny, and show responsibility while maintaining a reasonable debt to income ratio. So start building business credit today and avoid the use of your personal credit and guarantee.

To access business credit insider secrets, premium vendors, leasing companies, business credit cards, and lenders that report to all the major business credit bureaus become a member of my Business Credit Insider’s Circle. Submit your name and email below for details and receive a free audio seminar ($597 value) =>

 Marco Carbajo is a business credit specialist, author, speaker, and founder of the Business Credit Insider’s Circle. He is a weekly columnist for Dun & Bradstreet Small Business Solutions, a business credit blogger for All Business & American Express Small Business and author of “Eight Steps to Ultimate Business Credit” and “How to Build Business Credit with No Personal Guarantee.” His articles and blogs have also been featured in The Scotsman Guide, Alltop, Entrepreneur Connect, and Active Rain.