One of the easiest ways to start off on the right foot when it comes to building business credit is to get net-30 vendor accounts with companies that report to commercial credit agencies. Pay on time and you will build credit references that help boost your business credit scores.
Not sure what those are? Not to worry. This is your guide to setting up vendor accounts that will actually benefit your business credit.
What is a Net-30 Account?
A net-30 account is one that extends you 30 days to pay the bill in full after you have purchased products. It’s vendor credit that allows you to buy now and pay later. Vendors that report those payments to commercial credit agencies help your company establish strong business credit.
So what other options are out there? How can you build your business credit if you have a fledgling company?
Here’s a simple way to get started if your business is young or isn’t making a lot of money yet: vendor trade credit. Vendor credit lets you purchase goods or services from suppliers and vendors and pay later. It’s a great way to maintain cash flow and build your business credit history over time.
A net-30 account is one that gives you 30 days to pay your bill in full after you have purchased products. It’s vendor credit that allows you to buy now and pay later. Net-30 vendors that report those payments to commercial credit agencies help your company establish a strong business credit history.
Vendor trade credit is not just limited to net-30 accounts either—some vendors offer net-15 (15 days to pay), net-60, or even net-90 day credit terms. You’ll agree to whatever terms they are willing to offer and establish those terms on your purchase order, so make sure to read the fine print to ensure you understand your payment terms.
Where do you find these vendors? Below, we’ve provided three net-30 vendors (+ a bonus resource) that will make it easy to get started. Want more? Get a free Nav account and use the free Business Launcher tool, which provides the names of lenders and vendors that report.
Before You Open Net-30 Accounts…
Before you jump in and open accounts, we recommend you take a few essential steps to make sure your business is viewed as legitimate. If you don’t take the time to set up your business properly, you may not get approved for trade credit. This free guide explains how to set up your new business the right way, but here are a few tips to get started.
If your business is not set up as its own legal entity (such as an LLC or S Corporation), consider creating one. If you decide to operate as a sole proprietor, make sure your business is at least registered with your Secretary of State.
Make sure you have a separate business bank account rather than pay for business expenses from your personal checking account. And use a business email address on your account, rather than a generic email address like Hotmail to further legitimize your company.
While you can always purchase items from these vendors and pay with a credit card at the time of purchase, that doesn’t help you build business credit. You need to purchase on credit through the vendor.
7 (+ Bonus) Net-30 Vendors That Report to Commercial Credit
Let’s look at the vendors that offer net-30 payment terms and that report to the major credit bureaus.
Shirtsy is a direct to garment on demand printing company that allows you to customize, design and fulfill T-shirts, business cards and other accessories.
Best of all it, it reports to all major business credit bureaus including Experian, Equifax, Credit Safe, SBFE, Ansonia and NACM
Shirtsy is eager to work with both new and established businesses. There is no personal credit check. Shirtsy’s Net 30 Membership comes with an annual fee of $99 to access reporting with the opportunity to have this fee waived for those with exceptional credit history. To qualify for net 30 terms, a business must meet the following criteria:
- Must operate in the United States.
- At least 90 days old.
- No derogatory credit or delinquencies.
- Must have EIN (Tax ID for business).
Crown Office Supplies offers a wide variety of office supplies along with robust credit reporting. They offer a wide variety of items business owners need, from basics like stationary, all the way up to computers. They work with brand new businesses as well as those more established.
Crown Office Supplies reports to all the major commercial credit reporting agencies: Experian, Equifax, Credit Safe, SBFE and NACM. There is a $99 annual fee (which may be waived for businesses with excellent business credit). The annual fee is reported to the credit bureaus as well, which can also supplement the business credit history.
Creative Analytics is a digital marketing agency and management consulting firm that offers both a variety of essential products (such as small electronics, desk and office decor/accessories, fitness items, beauty professional tools, kitchen items, etc) and monthly digital marketing services (e.g. websites and social media plans) to grow your business. The best part is that account holders that sign up for monthly subscriptions get monthly revolving accounts reports to business bureaus with an up to $10,000 tradeline boost. They currently report to Equifax and Creditsafe.
An annual fee of $79 is required to apply, but all applications that meet the minimum criteria are approved (denials that don’t meet stated criteria are fully refunded). There is a minimum spend of $100 to be reported (the annual fee counts toward that minimum).
To qualify for NET 30 business account your business must:
- Must operate in the United States
- Must have a Tax ID # (EIN)
- Established for at least 30 days.
- Must not have any derogatory business reporting or delinquencies.
- Applicant must be an Authorized Officer of the organization.
Uline also offers a wide variety of products your business may need including shipping boxes, office furniture and supplies, food service packaging and kitchen supplies, and more. To qualify for a line of credit with Uline, you’ll need to first apply here.
Once you’re approved, just shop for supplies your business needs, then at checkout, choose net-30 billing as your payment option.
Pay on time or even make an early payment and you’ll have another credit-building account under your belt. Like Grainger, this account is considered quite easy to get. You don’t need to submit your Social Security number and your personal credit scores won’t be checked. Uline reports to business credit bureaus including Experian (business).
Another place to get office supplies online, from printer ink to pens, is Quill. When you set up your account you will be asked to fill out a profile that describes your business, including the year the business was started and the industry in which you operate. (Don’t be discouraged if your business is young; newer entrepreneurs often report success getting a Quill account.)
Once you find what you want to buy, add it to your cart. Proceed toward checkout and you’ll see a payment option called “invoice my account.” If approved, you’ll get net-30 terms on your invoice. According to Quill, approval can take 1-2 hours during business hours, or up to a business day if you apply outside normal business hours, Monday through Friday.
Similar to the other two vendors mentioned here, you don’t need to provide a Social Security number. Quill will verify your business address before extending terms. Again, most business owners who have properly set up their businesses should find it to be an easy process.
Another net-30 vendor who reports to credit bureaus is Summa Office Supplies, where you can shop for paper, folders, envelopes, labels, and any other office supplies your company might need.
The great thing about Summa is that they offer credit for both new and well-established businesses, and they’ll provide written trade credit references upon request. Pay your bill on time and then you can request larger credit lines. Summa reports to Experian and Equifax business credit.
To open your line of credit, fill out this application and put the code SOSNAV in the referral code field.
Grainger offers a large variety of products for businesses, including tools, plumbing supplies, and safety equipment. They also offer office and janitorial supplies. There is a very wide variety of merchandise offered, so you should be able to find something your business needs.
Signing up for a Grainger account is free and easy. You can create your online account to store shipping and invoicing details, but you’ll need to call 800-GRAINGER (472-4643) to set up your line of credit.
8. (Bonus) Nav
Nav isn’t technically a net-30 vendor, but paying your bill every 30 days for one of Nav’s paid plans (Business Boost or Business Loan Builder only) can help you build business credit by establishing a new tradeline with business trade bureaus like Experian and Equifax. You can automate payments so you never miss one! If you want to track your progress building business credit but don’t want to commit to a monthly plan, you can always check your business credit score for free on Nav.com.
Tips for Success
There are a few important caveats in this process.
First, and this is important, you do not have to run up debt and pay interest to build business credit via net-30 vendors. Most vendor payment terms allow you to purchase items and pay them off in full by the due date on vendor invoices to avoid interest. You may even get early payment discounts if you pay before the due date. That’s perfectly acceptable when it comes to building business credit.
It is also worth noting that credit limits typically do not appear on these reports. Instead, the highest recent balance will be reported. So if you spend a very small amount, you may not see the same impact as you will if you make larger purchases. You don’t want to fall into the trap of buying things your business doesn’t need, but if you do need more expensive items, consider getting them from companies that will report the transaction to credit bureaus whenever possible, to get the added benefit of building credit.
Note that unlike personal credit, the names of your vendors will not appear on your business credit report. Instead, they will report as “business type” such as packaging. So keep track of which accounts you have opened and when; you may need to match that to your credit reports if you aren’t sure which account is coming from which vendor. Also, keep in mind that not every vendor reports to all the major business credit bureaus.
Learn more: Experian business credit report
Pay early when possible. Unlike with your personal credit accounts, where you can usually go online to pay your account and have your payment credited the same day, it may take longer for payments to vendors to be processed. If you mail in your payment, do so at least a week before the due date to ensure your credit report reflects on-time payments, because late payments can negatively impact your business credit score and credit history.
It may take a month or even two before one of these accounts shows up on your business credit reports. Be patient and monitor your credit. If it doesn’t appear in your payment history by the third month after you’ve opened it, contact the vendor to make sure it is properly associated with your business and to confirm it will be reported with at least one of the three business credit reporting agencies.
Also worth noting: new accounts sometimes have the effect of lowering business credit scores. This is usually temporary and over time you should see a positive impact as you pay on time.
Net-30 Vendors are Great for Your Business Credit
Once you’ve established a business credit file, make sure you are doing your part to build your credit history. If you apply for business credit cards or loans, lenders and card issuers will look at your history of on-time payments, how much credit you have available versus how much you have used, and your business credit profile and score. All of these factors go into whether your credit application will be approved, as well as the payment terms you are offered for a loan, so it’s in your business’ best interest to work with net-30 vendors to build that credit.
If you can’t work with a vendor that reports to business credit, Nav’s Business Boost and Business Loan Builder plans feature tradeline reporting, which, over time, may help you build a stronger business credit profile.
This article was originally written in September 2017 and updated on February 7, 2020.