When establishing business credit, there are actually three types of credit you can get: vendor credit, starter accounts that offer Net 30 terms, store credit, revolving credit cards available in retail stores and cash credit, revolving credit cards such as Visa and MasterCard that card issuers or banks approve you for.
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You must get approved with vendors first who offer Net 30 terms then after you use those accounts and pay your bills the accounts will get reported to the business credit reporting agencies.
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Then and only then will you have an established business credit profile and score. Once your business credit is established, you can start to get approved for store revolving credit next.
You should seek out vendors who will approve a business for credit, even if none is established yet. There are actually many vendor sources that are well known for this: ULINE, Quill, and Laughlin and Associates. Just to name a few.
To start business credit, you first should get approved for accounts with these vendors.
Some will require you purchase their products first and some will have you make three orders and pay before they’ll issue you a line-of-credit. But all of the sources I listed will approve a brand new business, even if you have no credit now.
You’ll want to insure you have a total of five payment experiences reported before you even think of applying for store credit.
A payment experience is the reporting of an account to a business reporting agency. So Quill, for example, reports to both D&B and Experian that means that one account will count as two payment experiences. Laughlin only reports to Experian, counting as one payment experience.
All vendors don’t just give out no personal guarantee credit. Many have requirements that must be met first but there are a lot of sources who don’t have these requirements.
Laughlin and Associates only requires a purchase, and that you have a 411 number and business bank account.
Quill won’t approve you right away, unless your D&B profile is established, but they will approve you if you first place a few orders with them.
ULINE will approve you for an initial vendor account if you have two good trade references and at least one good bank reference.
You’ll need to know how many payment experiences you have established before trying to apply for store credit.
