Shortcuts are great when you’re a small business owner. Finding a way to do something faster, easier and more efficiently — without sacrificing quality — means greater productivity and often profitability.
If you’re trying to understand how to establish business credit, you may wonder what’s the fastest, easiest, or more efficient way to build a business credit profile.
Is it a small business loan, line of credit, or business tradelines?
Learn how to decide what’s best for your business, as we explain tradelines vs business loans and lines of credit for building your business’s credit history.
What are business credit tradelines and why are they important?
Let’s first explain what each of these types of financing mean.
Business line of credit & credit cards
Business lines of credit (LOCs) work a lot like a credit card. You get approved to borrow up to a specific credit limit, and you can borrow as much as you need, when you need it. When you pay it back, you can borrow again.
Most business credit cards also offer a line of credit that allows you to use the card to pay for purchases over time.
Small business loans
Small business loans can take many forms, including traditional bank term loans, small microloans from nonprofit lenders, online business loans, or loans guaranteed by the SBA.
Tradelines
Finally, tradeline is simply another word for account, and there are different types of tradelines—including loans and lines of credit.
However, when used in the context of building business credit, it may refer to trade credit (for example, supplier or vendor credit, like net-30 accounts), as well as accounts like Nav Prime that report to business bureaus.1 That’s how we’ll use it here.
Just understand that technically any account that appears on your credit report may be considered a tradeline.
Tradelines of all types, including business loans and lines of credit, are critical when it comes to building your business credit file. These accounts provide valuable information about how your business manages its financial obligations.
On-time payments, and other factors like credit utilization, are used to create credit scores that predict how your business will handle new credit.
In this article, we use ‘tradeline’ to refer to credit accounts that report to business credit bureaus, such as vendor accounts or Nav Prime. Not all tradelines are reported or impact your scores positively.
Which is better: a business line of credit, tradeline, or business loan?
Whether a business line of credit, business loan or trade credit is better depends on your business needs and qualifications.
Business needs
If you need access to funds when cash flow fluctuates, a business line of credit can be enormously helpful. It allows you to pay for the goods and services your business needs before money comes in. It’s one of the most popular types of business financing due to its flexibility.
If you have a bigger project and need to borrow a specific amount of money, a term loan can be ideal. These loans often carry a fixed repayment period and predictable monthly payments that make it easier to budget for the repayment of the debt.
Tradelines like accounts with net-30 payment terms can be great for improving cash flow, as you can buy the supplies or services your business needs and pay for them later—hopefully using revenue the business brings in.
Let’s say you have a food truck, for example. If you can get ingredients, beverages, or even paper products on net-30 terms, you can set up the truck, make sales and then pay those vendors back.
Qualifications
Business credit cards may be easy to get, provided you have good personal credit scores (a credit check is almost always required) and sufficient income from all sources, not just the business.
Business loans can be harder to get if your business is new or you aren’t making a lot of money. Some lenders prefer to lend to borrowers with at least one to two years or more in business, and with minimum revenues that could start at $5000 — $10,000 or more monthly. MOVED TK
Tradelines like net-30 accounts or Nav Prime are easy to get, and are available to businesses ranging from startups to well-established businesses.
What are the pros and cons of using tradelines vs. taking out a business loan to improve credit?
First, it’s important to understand that not all small business loans will affect business credit scores. That’s because not all lenders and financing companies will report payment history to business credit bureaus. Many do, but if building credit is a priority, be sure to check.
With that in mind, here are some pros and cons of each option.
Business loans vs. net-30 tradelines vs. lines of credit
Credit type | Pros | Cons |
Business loans |
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Net-30 tradelines |
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Lines of credit |
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Many entrepreneurs start with net-30 tradelines to establish a credit foundation, then add business loans or lines of credit as their business grows and needs more substantial financing options.
Do tradelines boost credit scores?
Yes, tradelines can boost business credit scores if they are reported to commercial credit bureaus and they are paid on time, over time.
Many business loans and lines of credit are reported to business credit bureaus but often through the Small Business Financial Exchange (SBFE), which then makes that information available to partner credit bureaus like Equifax, Experian, and Dun & Bradstreet. That means those accounts may not impact certain credit scores.
Most business credit cards report to at least one of the major business credit reporting agencies or the SBFE. Learn how business credit cards report.
As for tradelines, like net-30 accounts, not all vendors or suppliers report so you may need to seek out those that do. Here’s how to find easy net-30 accounts that report. When they are reported to business credit, it’s often to at least one or two major credit bureaus.
Nav Prime may help build business credit by submitting tradeline information to certain major business credit bureaus. Note that reporting is not guaranteed to appear on all business credit reports.
How many tradelines do I need to build business credit?
Establishing business credit requires you get accounts that report to your business credit history, and pay them on time.
Ideally, you will want to get at least two to three tradelines that report, use them to keep them active, then pay on time. Easy ways to get started include:
1. Net-30 vendor accounts that report to business credit.
2. Nav Prime offers one tradeline submitted monthly to the major business credit bureaus that may help you build and maintain a business credit history. If you qualify, the Nav Prime Card also offers another business tradeline.2
3. Business credit cards that report to business credit agencies. (Most do.) Business charge cards, which require payment in full, also help build credit.
Most business credit cards require good to excellent credit scores, which often means a FICO score of at least 680 or above. If you can’t qualify for a business credit card, you may want to consider a secured business card. These cards can be easier to get, even if you have bad credit or limited credit, because they are backed by your security deposit.
Use this credit building cards resource to find the right card for your business.
Should I use tradelines or take out a business loan to improve my company’s creditworthiness?
There are multiple ways to build good business credit, so don’t feel like there is only one path to take. Only consider financing options that align with your current business needs and cash flow. Building credit should not require taking on unnecessary debt.
If you are ready to get funding, it may be helpful to apply for a line of credit before you’re strapped. You may not need to use it in the meantime, but it’s there if cash flow issues arise — whether that’s a client who pays late or an opportunity to buy steeply discounted inventory arises.
An easy way to get started is with Nav Prime. It helps you check, monitor, and manage your business credit — and your monthly payment is submitted as a tradeline to multiple business credit reporting agencies. Reporting is not guaranteed.
Reports and scores are updated monthly when you log in. This will help you understand what information companies are reporting about your business, and view both business and personal credit in one dashboard.
Get more helpful information in the Credit Health hub, where you’ll see key factors having the most impact on your scores, aggregate trends in your credit, and insights into new progress you’ve made.
You’ll also see details on public records, including UCC filings, that can directly and indirectly impact financing or other opportunities.
Why would a business choose to use a line of credit rather than obtain a loan and receive all the money at that time?
Why are lines of credit such a popular type of funding for small businesses? It’s because they offer tremendous flexibility.
If you get a business term loan, you’ll pay it back over time and pay interest until it is paid off. You can get a line of credit before you need it (if your business qualifies).
Both types of financing may be available through online lenders as well as traditional banks and credit unions.
Some lenders will check personal credit reports, some check business credit, and some check both.
Some lenders require collateral, a personal guarantee and/or will place a UCC filing.
Line of credit vs. term loan
Line of Credit | Term Loan | |
Interest | Pay interest only on the amount borrowed. | Pay interest on the loan balance until repaid. |
Qualifications | May secure a line of credit before financing is needed. | Get financing for a specific purpose. |
Interest rates | Variable interest rates are common. | Interest rate may be fixed or variable. |
Nav’s verdict
The main way to build strong credit for your business is by getting tradelines (accounts) that report to business credit, and paying them on time.
A variety of financing options can help you build credit, as long as the lender or company that offers financing reports payments to business credit. Choose the type of credit that’s right for your business needs.
Nav can help you check, monitor and manage your credit as well as find the right financing for your business.
Frequently asked questions
This article was originally written on October 9, 2025 and updated on October 10, 2025.
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Gerri Detweiler
Education Consultant, Nav
Gerri Detweiler, a financing and credit expert, has been featured in 4,500+ news stories and answered 10,000+ credit and lending questions online. In addition to Nav, her articles have appeared on Forbes, MarketWatch, and Startup Nation. She is the author or co-author of six books, including Finance Your Own Business, and she has also testified before Congress on consumer credit legislation.