Four Easy Approval Net-30 Accounts
If you’re looking to establish business credit with easy net-30 accounts, this comprehensive guide will help you understand how to get started. We recommend you review the entire guide to get the full picture of how to build and maintain strong business credit using trade credit.
Each supplier listed here offers a wide variety of products that many businesses can use. By purchasing items you need for your business on payment terms and then paying on time, you can build a solid business credit history.
Note that we have carefully reviewed and checked these offers with multiple sources. We will continue to update them periodically. Keep in mind terms and credit reporting arrangements may change. Feel free to share your experiences in the comments below.
1. Summa Office Supplies
Products offered: Office supplies such as paper, folders, envelopes, labels etc.
Reports to: Experian and Equifax (business credit)
Worth noting: Summa Office Supplies is eager to work with small businesses, and their stated goal is to provide the “human touch.” They offer credit for both new and well-established businesses and will provide written trade credit references upon request. As you establish a positive payment history, you can request larger credit lines.
Open a Summa Office Supplies account now. Use code SOSNAV at checkout.
Products offered: Office supplies, including a wide variety of supplies in the following categories: cleaning, coffee/snacks, safety, laboratory, healthcare, health and wellness and more.
Reports to: Dun & Bradstreet
Worth noting: Some business owners with no business credit history have reported they were required to purchase at least $100 of products per month over a 90 day period and pay those off before qualifying for a net-30 account.
Products offered: Over 1.6 million industrial and safety products offered
Reports to: Dun & Bradstreet
Worth noting: While a Grainger account is generally easy to get, some business owners have reported that they were unable to qualify immediately because they had no business credit references, or because their business was just recently incorporated. Some found they were able to talk with a representative to establish credit terms, while others had to start with other accounts.
Products offered: Packaging, janitorial, food service, safety warehouse supplies and more
Reports to: D&B and Experian (business)
Worth noting: Most business owners report success opening a credit account with Uline. If your business is young and you have trouble qualifying, you can contact their credit department.
Before You Start
Before you start applying for vendor accounts, it’s important to target your efforts so you apply for accounts for which you are likely to qualify. Some companies have more stringent requirements. Here, we will show you how to start with easy net-30 terms and work your way up to additional accounts:
We recommend you take these steps before you apply for vendor credit:
- Get an Employer Identification Number (EIN) from the IRS. Many businesses obtain an EIN for tax-reporting purposes. An EIN will not be the identifying number in the business credit system the way Social Security numbers are for personal credit; however, you may need an EIN for credit applications.
- Register your business with your state. We strongly recommend you form a legal entity such as an LLC, S Corp or C Corp. If you decide to continue operating as a sole proprietor (no legal entity) we recommend you at least register your business name as a fictitious name (also known as a “DBA”) with your state.
- Get a D-U-N-S number if your business doesn’t already have one. This is the identifying number in the Dun & Bradstreet business credit database. Not sure if your business has one? Look up your business credit for free here.
- List your business phone number with directory assistance. Here’s how.
When You Apply
- Use your business name and information on the application.
- Be consistent in the way you list your business name, address, phone number, etc.
- Avoid using personal information such as your Social Security number whenever possible.
You may have to start with a low credit limit initially. As you establish a track record of on-time payments you can ask for a higher credit limit. Remember, these companies want to do business with customers who make purchases and pay on time.
Why Get Net-30 Trade Accounts?
Learning about net-30 vendor accounts was a game-changer for serial entrepreneur Levi King’s first business, a sign manufacturing business he launched in his twenties. Because he had been raised to avoid credit and debt, he bootstrapped his business, and cash flow was always an issue.
He’d have to purchase cement, plastic, steel and other supplies— plus cover labor and other overhead costs— before he could manufacture and install the signs his clients would purchase and pay for later. It was incredibly stressful and there were many sleepless nights when he worried about how he’d keep his business afloat.
Then one of his suppliers suggested he fill out a credit application, which would allow him to get supplies on net-30 terms, which meant he wouldn’t have to pay the supplier for thirty days. With that extra time to pay, he could often complete a job and invoice his clients without laying out money for the supplies up front. “It was a great way to float costs between customer payments,” he says.
How Trade Credit Works
Trade accounts (vendor or supplier credit), are accounts offered by companies that sell to businesses of all sizes. The vendor or supplier essentially becomes the lender by allowing customers to “buy now” and “pay later.”
Net-30 terms means full payment is due 30 days after the invoice date. Net-60 gives you 60 days to pay, etc. Always pay on time— early if possible— to establish a good payment history. Business credit reports may report payments as little as one day late, and with the D&B Paydex score, you’ll earn the highest score by paying early.
Trade credit is used in a wide variety of industries including:
- Medical offices
- Most B2B companies
Even freelancers who provide services are essentially offering net-30 terms when they perform work for a client and get paid later. It’s the most popular form of small business financing!
Why Trade Credit Matters
There are a number of advantages to establishing net-30 vendor accounts. They include:
- Improve Cash Flow: Paying for items you use in your business can improve cash flow. Some vendors will start customers off at net-10 or net-30 terms, but a number of them will extend longer terms to good customers with on-time payment histories.
- Separate Business and Personal Credit: By securing payment terms with your vendors, you can separate your business and personal credit, and avoid using personal credit cards to purchase supplies for your business.
- Build Business Credit: Vendor accounts that report to business credit reporting agencies will help your business build business credit, which in turn makes it easier to get other types of business financing. The D&B Paydex Score, for example, is calculated by evaluating payment history with vendors.
- No Personal Credit Check: Some suppliers and vendors (but not all) will not check the owner’s personal credit check. That means business owners with ‘bad credit,” may be able to begin to establish vendor credit while they continue to work on their personal credit.
Vendor Accounts Without Personal Guarantees
Some business vendors and lenders may request or require a personal guarantee (PG). With a PG, you agree that if your business doesn’t repay the debt, the lender can try to collect from you personally. While it’s best to avoid PG’s when possible, they may be required in some cases, especially when your business is young and hasn’t established strong revenues and/or business credit.
Tip: Read the application and terms and conditions carefully to determine if a PG is required. If the vendor asks for personal financial information such as a Social Security number, it may check your personal credit and a personal guarantee may be required. Don’t be afraid to clarify that with the lender if necessary.
Business Credit Cards: Another Easy Way to Build Business Credit
A business credit card can be used in a way similar to vendor credit: you can purchase items you need for your business and pay for them later. Most business credit cards offer a grace period, which can give you days or weeks to pay before incurring interest, depending on the timing of your purchase. Some business credit cards offer low-rate purchases and/or balance transfers, making them attractive when your business needs to borrow for longer periods of time.
A business credit card is also an important way to build business credit. As this chart explains, most business credit cards report to at least one of the business credit bureaus and most report to multiple bureaus. Paying at least the minimum payment on time on your business credit card on time can help you build strong business credit.
When you apply for a small business credit card, there will be a personal credit check and a personal guarantee will be required. Generally a good personal credit score will be required. It’s not until you move into “corporate credit cards” available to larger businesses with significant revenues that you can move away from these requirements.
While tose may seem like drawbacks, they also offer advantages: as long as you have decent personal credit scores (usually in the mid-600s or higher) and sufficient income from all sources (not just business revenues), you should be able to qualify. These cards are often available to startups and businesses with little revenue.
Tip: By using Nav’s MatchFactor technology, you can see your top business credit card options alongside your latest personal and business credit scores.
The bottom line: a business credit card can complement net-30 accounts and offer similar advantages, including improved cash flow and the ability to build business credit.
Report Accounts You Already Have
You may already have accounts that give you payment terms, even if you don’t think of them that way. For example, if you have a cell phone bill, you probably pay for the service and data you’ve used in the previous month. The same is true of your internet service, utility bills etc. But often those accounts don’t report to business credit and therefore your monthly payments don’t help you build credit.
There’s a new service called eCredable that will verify and report those accounts to your Experian business credit bureau report for a small fee. Even better, it will report the most recent payment history up to 24 months. That means you can get “credit” for bills you’ve already paid! (Of course, that also means you’ll also want to make sure you haven’t had a late payment in the past two years on any account you want reported.)
Note these accounts can be in your personal name as long as you verify you use them for your business. Learn more about this service and read our review here.