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START BUSINESS CREDIT WITH VENDORE CREDIT

START BUSINESS CREDIT WITH VENDORE CREDIT

What We Will Cover In This Article:

  • 2 proven ways to establish initial business credit
  • 7 vendors who can help you build business credit and how to get approved
  • How anyone can get high-limit revolving corporate cards with no credit check guarantee.
  • How to get retail, fleet, and cash credit for your EIN
  • How to get approved for up to $150,000 in credit lines that help build business credit

This Article is for You If

  • You are looking for money to grow your business
  • You’ve been denied financing or credit or think you will be
  • You want the easiest and fastest way to get capital
  • You want your business to fund itself
  • You want the blueprint to get away from personal guarantees
  • You want the most money at the best terms to start or grow

Building Business Credit

EIN

Having an EIN doesn’t mean you have established credit

Necessarily Fundable

It does not mean your business is necessarily fundable

Credit Established

If you go to bank and try to get cash credit using your EIN with no credit established, you will always get denied, guaranteed

Personal Credit

The only exception is if you have good personal credit and used it to get approved while supplying your personal guarantee

Business Credit Problems

  • Lots of people fail at building business credit
  • Many try banks first and are turned down
  • Many don’t apply for accounts in the right order
  • Most don’t know the vendors to apply with
  • A lot have questions and don’t know where to turn
  • Many rely on advice from rookies who are also learning

How Business Credit is Built

  • First, you must build tradelines that report vendor credit
  • Then, you’ll have an established credit profile
  • Then you’ll get a business credit score
  • With an established business credit profile and score you can start getting retail and cash credit

Business Credit Benefits

  • Get approved regardless of consumer credit quality
  • No consumer credit inquiries or reporting
  • No personal guarantee is required
  • Credit limits 10-100 times consumer credit (per SBA)
  • Get credit quickly because scores are based on payment history
  • Separates reports of consumer and commercial
  • Establishes your credibility for lenders, suppliers, and credit issuers
  • No collateral or cash flow requirements
  • High-risk industries and startups can get approved

Why Don’t You Want to Give a Personal Guarantee?

Business Debts

Banks try to minimize their risk by having you personally guarantee your business debts

Guarantor Or Co-signer

If as a guarantor or co-signer you cannot pay the business debt, your private assets will be targeted, as in your accounts, vehicle house, stocks, and anything else you may have used to guarantee that card can be seized to pay your debts.

2 Ways to Establish Initial Credit

  • There are 2 main ways to establish initial business credit
  • The first way is using vendors who will give you credit even as a new business

  • Cashflow, credit, nor collateral affect your approval for these accounts

  • For this to work, you must use vendors who report that credit to a business CRA
  • A shortcut to building initial business credit is to use your personal credit and a PG to get accounts that report to the business CRAs
  • With this program, you can get approved for up to $150,000 in credit lines that report to the business CRAs
  • This program is called Credit Line Hybrid

Use Credit Line Hybrid to Build EIN Credit

  • Get up to $150,000 with credit line hybrid
  • 0% rates
  • No DOC
  • Take cash out
  • Startups welcome
  • Credit partners welcome
  • No collateral or cash flow requirements
  • Multiple card approvals, typically 5-8
  • Business and standard cards
  • Funding free roll-in

Starting With Vendor Credit

  • You won’t get a Visa or MasterCard right away
  • Start with vendor credit instead
  • These trade lines are creditors who will give you initial credit when you have non now
  • They typically offer terms such as Net 30, instead of revolving
  • So, if you are approved for $1,000 in vendor credit and use all of it, you must pay that money back in a set term, often within 30 days on a Net 30 account

Vendor Credit Accounts

  • Net 30 accounts must be paid in full within 30 days
  • Net 60 accounts must be paid in full within 60 days
  • To start your business credit profile the right way, you need to get approved for vendor accounts that report to the business credit reporting agencies
  • Once that’s done, you can then use the credit, pay back what you used, and the account is reported to Dun & Bradstreet and/or Equifax.
  • 10 + vendor accounts help lead to the big payoff
  • But if you have 3-6 accounts reporting you can start applying for the next tier
  • Once you’ve used your credit and showed that you are responsible, work to get your limits increased.
  • Higher limits also assure banks and other credit providers
  • They are another key factor to fundability
  • Once reported, then you have
  • Trade lines
  • An established credit profile
  • An established credit score
  • You can then get approval for retail credit tier
  • Then eventually cash credit
  • All without needing to supply a personal guarantee
  • This is possible because now your EIN credit profile is established and can stand on its own.

Getting a Vendor to Approve for EIN Only

SSN

Most vendors won’t ask you for your SSN

SSN Field Blank

If they do, you should leave the SSN field blank, or ensure there is no credit check or PG

Consumer Credit

If you don’t do this, the vendor will make their approval decision based on consumer credit quality

Personal Credit

This also means an inquiry on your personal credit

Getting a Vendor to Pull Credit Under your EIN

Law Requiring

Lenders and credit issuers have a secret set of criteria that you must meet to get approved.

2 Federal Laws

There are 2 Federal Laws which make it a felony to use any other number than an SSN in an SSN field, but you can legally leave that field blank

Credit Approval Decision

The credit approval decision will then be based on the quantity of your business credit reports and scores and not on that of your consumer credit

Getting Started

  • Over 93% of trade vendors who issue credit don’t report it to the business reporting agencies
  • Som you must find sources which do report
  • These sources are very limited
  • Ensure your fundability is strong before applying
  • Otherwise, you may wait months for new accounts to report

Vendor Credit: the Details

  • You must have 5+ vendor accounts reporting to move on to the Retail Credit Tier, Fleet Credit Tier
  • Some require 5, other retailers may require 8+
  • Do not apply for Retail Credit Tier without having 5+ reporting accounts first
  • It will take 30-90 days for those accounts to report, some report monthly and some quarterly
  • Find monthly reported accounts to expedite results
  • A “payment experience” is an account reported to a business credit reporting agency’
  • So if you get approval with a vendor who reports to Dun & Bradstreet and Experian, that counts as 2 payment experiences
  • If that account only reports to D&B, that is just 1 payment experience
  • Get accounts that report to multiple agencies to expedite results

Getting Initial Business Credit

  • You then need a total of 14+ payment experiences to get approval for cash credit like from Visa and MasterCard
  • Generally to get that cash credit you also need one of those payment experiences to have $10,000 limit or higher
  • This is so you can start getting generous limits on the cash credit you secure
  • It pays to continuously push for higher credit limits

Building Business Credit: Need to Know

  • Many retailers have time-in-business (TIB) requirements

  • Many retailers have revenue requirements

  • This does not mean you shouldn’t apply
  • If you have the right number of reported vendor accounts, you can get a manual review to get approved anyways.
  • The key to building business credit is to get a high number of payment experiences

Vendor Approval Process

  • The approval and reporting process is different for most vendors
  • visit their website and find items you want/need
  • Put those items in your cart and go to checkout
  • Choose their invoice option such as “invoice me”
  • Complete check out without giving payment details
  • When you get shipment notice, you were approved
  • Pay invoice ASAP after shipment

  • Monitor reports to see reporting at: www.creditsuite.com/monitoring

Uline Shipping Supplies

  • They sell shipping, packaging, and industrial supplies
  • They report Dun & Backstreet and Experian
  • Have an EIN with the IRS
  • Have a business bank account
  • You must have a DUNS number before starting with them
  • You usually need an order to be $50 or more before they’ll report it
  • Your first few orders might need to be pre-paid to initially so your company can get approved for Net 30 terms
  • Visit them at: uline.com

Quill Office Supplies

  • They sell office, packaging, and cleaning supplies
  • They report to Dun & Backstreet
  • To apply, you must have a D&B PAYDEX score
  • They will also check you on Experian
  • You must place your initial order 1st unless your D&B score is already established
  • In general, they will put you on a 90 day prepayment schedule
  • If you order items each month for 3 months, they will typically approve you for a Net 30 Account
  • Visit them at: quill.com

Grainger Industrial Supply

  • They sell hardware, power tools, pumps, and more
  • They also do fleet maintenance
  • They report to D&B
  • To qualify, you need a business license, EIN number, and a DUNS number from Dun and Backstreet. They might ask for additional business documents for verification
  • For less than $1,000 credit, they will approve nearly everyone with a business license.
  • For over $1,000 credit, they want to see trade and bank references
  • Apply online or over the phone
  • Visit them at: grainger.com

Hardware Express

  • Great hardware Net 30 vendor credit
  • Can get a credit line of $500 to $25,00
  • They report to Experian
  • You have a 21 day grace period to pay
  • EIN number required
  • DUNS number required
  • Must have a Business Bank Account
  • Apply over the phone at 888-803-4469

Strategic Network Solutions

  • They offer technology training and tech support
  • Reports to Experian and Credit Safe
  • New businesses can get a credit limit of $1,000

  • To qualify, you need an EIN, to have your business already squared away, a DUNS number, and a license is applicable.

  • Visit them at: https://stntsol.com

WEX Fleet

  • Get fleet cards from WEX, to repair and maintain the vehicles your business uses.
  • They report to D&B, Experian, and Equifax
  • Terms are Net 22 but they can extend to Net 30
  • To qualify, you must supply your SSN, EIN, and have a business phone number on a 411 listing, as well as a deposit of $500.
  • Fleet cards come with a rewards program
  • Make sure to apply for the WEX Fleet Card and not the WEX Fleet FlexCard that requires a personal guarantee
  • Apply now: www.wexinc.com/solutions/fleet-management
  • Apply over the phone at 888-803-4469

Summa Office Supplies

  • Office supplier that specializes in quality office products and supplies at guaranteed savings
  • Net 30 account with normal businesses getting $2,000 limit
  • They report to D&B and Equifax
  • Minimum $75 purchase to report
  • Approvals require EIN and entity, business address matching everywhere, business license if applicable, business bank account, and a DUNS number.
  • Apply now: www.peopleready.com