Where Can My Company Find an Unsecured Business Line of Credit?

11. January 2013
Unsecured lines of credit can be tough to come by if you haven’t spent the proper amount of time building corporate credit. The whole idea behind an unsecured loan of any kind is that you have shown yourself to be reliable and able to pay your bills on time. Once you have created a strong business credit history, getting an unsecured business line of credit is possible from any of a number of resources. Why Get a Line of Credit? A line of credit is an excellent form of long term loan when you know the possibilities of large expenses exist, but don’t want to pay for them before they occur. A business line of credit gives you a cushion for seasonal fluctuations or the ability to increase your inventory for an unexpected order and still keep your cash flow moving.  Small Business Association Help in Obtaining Unsecured Business Lines of Credit Since you make no payments and have no interest added to the loan on money you don’t use, you can have the line of credit and make no payments for as long as you can delay spending the money, but it will be there when you have to have it for major purchases or to tide you over during a tough spell. The Small Business Association provides many resources to help you get started in obtaining a line of credit for your business. They do not give out loans themselves, but their service vets your company so that when you go to a bank to apply your acceptance is guaranteed. An even bigger benefit of the SBA is that they will tell you if you are ready to apply, help you with the tools you need in building corporate credit if yours is weak, and provide insights to other loan options if necessary. Unsecured vs. Secured Even a brand new business owner can get a line of credit for a start up when capital is most needed if they have good personal credit and want to use it to back a loan. This isn’t always the best option, however, and puts even good personal credit at risk. A better option is to use vendor accounts and corporate credit cards while building corporate credit so that you can prove your stability and ability to pay. When your business credit rating is reliable you can get an unsecured line of credit much easier without risking your personal financial background.

Business Credit Cards, Vendor Credit Lines

What Business Owners Need to Know about Vendor Finance

30. October 2012
Vendor accounts are usually the first place a new business without established credit can look for funding that helps them develop a business credit rating. Vendor finance is easy to understand. It works a lot like a credit card, only it can only be used at the company providing the vendor finance. Where to Look for Vendor Accounts The first place to look for vendor finance is at companies you use often already. If they are a local company and the owner knows you, it is a fast step in the right direction. Bigger corporate box stores may be more difficult, but because the terms are usually so agreeable even they can be a good resource. The most important rule of vendor finance is only apply at companies that you are most likely to use often. It doesn't help you to have a bunch of vendor accounts that you never use. Know the Terms of Vendor Accounts Before applying for an account, make sure you understand what the terms of that business’s vendor accounts are. The biggest way a vendor account differs from a credit account is that the balance is not carried over a long period of time. With a vendor account there is a very specific time period to pay for anything purchased during that time.  Vendor accounts are typically noted as 30net, 60net or 90net. The number stipulates the number of days you have to pay for a purchase. If you buy some office supplies on November 10th, and the account is 30net, you must pay for the things purchased on November 10th on or before December 10th. If paid for on time, you won’t owe any interest, but if you are late you will be charged a pre-determined amount until it is paid. It is important to note that if you bought something else on November 15th, that amount is not due until December 15th (30 days later). In spite of that, to alleviate confusion, many business owners choose to pay the full amount of the purchases made during a single month at the end of the month. That eliminates any possibility of forgetting a purchase made. Vendor accounts are a fast way to establish and build business credit. As long as you pay your accounts on time you will have a good credit rating in no time.

Vendor Credit Lines

The Easiest Way To Get a Business Credit Line

19. October 2012
Getting funding for your business can be a daunting affair. Especially if you are just starting out and do not have a history of business income to rely on for proof of fiscal standing or an existing business credit report to show responsibility. Take heart though, there are still ways you can get financial backing to help you get the things you need for your business at the beginning. One of the most common and often easiest ways to get a business credit line is to approach companies you do regular business with. These can be office supply stores, equipment rental venues or other companies that make specific types of products or services. Ask the company for a vendor line of credit. This gives you a set amount of money to work with that can get you items or services needed while you are waiting for funds to materialize. The Difference between a Vendor Account and Other Styles of Business Credit Line  Most credit or loan funding is payable over a long period of time. Vendor credit accounts are short term loans meant to be paid in full by a specific date. When you apply for a vendor business line of credit, make sure you understand the terms of the contract. These terms are expressed as net30, net60 and net90. Of course there can be other variations, but those are the most common and what those mean is that the balance of your account is due 30 days (or 60, 90 depending on the number following the net) after purchase. This can confuse some new to vendor accounts because you can make a purchase at the beginning of the month and it will be due at the end of a typical month on a net30 account, but if you purchase something in the middle of the month, that portion of the money spent during the month isn't due until the middle of the following month. If you find that confusing it is always best to pay the full balance of your monthly account at the time due to avoid possible late penalties.

Business Credit Asset, Vendor Credit Lines

What are the Best Business Loans for Your Business?

21. August 2012
The best business loans for your company depends on two things: what you are using the money for and how good your business fundability is. Of the two issues, your business' overall fundability is probably the more important of the two. If you have taken the time to create a solid credit profile for your business separate from your own, whether yours is good or bad, will enable you to obtain any type of loan you need.Short or Long-Term NeedsIf you have a detailed business plan made out you can easily tell when your expenses will be long-term and when you will just need money to get you by from month to month for average expenses. The best times of business funding for short term needs such as supplies and small equipment are vendor accounts and business credit cards. Luckily, those two types of funding are easier to obtain, and even brand new businesses can usually get the money they need quickly. Paying those short term loans off on time will establish better business fundability so that when you have big expenses you can get traditional loans to cover them.If you have big expenses just starting out and haven't had time to establish your business fundability, it may be necessary to look outside of traditional sources. Funding large initial expenses with your own savings can be risky, but is one way to get the ball rolling without using your personal credit, paying high interest rates, or worrying about income when your business is just starting out. If you don't have the ability to fund your own business, look to relatives and friends who may be able to help out. If they share your vision, you can get money easier, often without interest or strict payment schedules. When it does come time for a more traditional style loan; banks often overlook loan obligations to relatives.Less Traditional Funding ResourcesWhen you need money fast and can't personally fund your business and family and friends aren't able to help out, you can look for less traditional forms of funding. Venture capitalists look for good deals on new businesses just starting out. They are often less strict when it comes to business fundability, and tend to favor unique and interesting ideas over repayment track records. Understanding the reason behind that difference in outlook is important however. Venture capitalists are not exactly lenders. They may give you the money you require, and it sounds like a great idea since there are no monthly payments. Venture capitalists, though, usually require a percentage of your company in return for backing you financially.Grants are another great source of non-traditional funding and you don't have to repay the funds. With a grant, however, business fundability as well as strict adherence to how the money is spent are a big part of getting a grant.

Vendor Credit Lines

Are there Vendors Who Extend Credit that I Should Not Accept a Line of Credit From?

26. June 2012
A lot of thought goes into how to get a vendor account. For new and small businesses, using vendor accounts is a great way to build business fundability and credit ratings. However, too often, new business owners rush into obtaining vendor accounts without any thought as to the quality of the account. The basic fact is that a vendor account is only as good as the vendor supplying it. If the vendor isn't a company you would choose to buy from for any reason there is no reason to open an account. Lines of Credit A vendor account is similar to a bank line of credit, although the payment process is shorter. If you are a new business without previous loan history a bank will expect you to have at least 5 vendor accounts when you apply for a traditional loan. This helps them establish your business' fundability. However, open lines of credit mean open access to money. That makes you risky if you have too much credit available that you haven't already used. You could take the new loan and then run up additional debt in your vendor accounts until you can't pay back either in a timely manner. Don't open a vendor account if you aren't going to use it.  What to Watch Out For When Judging a Vendor Vendors who treat you with kid gloves and tell you how wonderful you are may be telling you the truth, but in reality they also may just be telling you what you want to hear to get your business. Check out what the vendor has to offer, what their prices are and what their relationship is with other clients/customers. Know what You Need Just because a vendor offers credit for businesses doesn't mean you need what they offer. If you are a business office getting vendor credit at a construction supply company doesn't make any sense even though you may be able to get it. Ask other similar business owners who their vendors are. It is helpful to be a part of a community and you can find many resources online to connect with other small business owners just like you. Look within the profit and growth section to find out more about creating B2B relationships and picking the right vendor for your needs.

Vendor Credit Lines

Will having too many vendor credit lines hurt my business credit scores?

15. March 2012
Having “too many” accounts is relative to each business. Some larger companies that are using our Business Fundability System have more then 50 trade lines and that is perfectly normal given their industry, size and history. Other start-ups may feel like they only need 1 or 2, however, that is definitely too few. In order to build a solid Business Credit Asset™ you need to have at least 10 trade lines reporting with a high limit of $10,000 on one of those. This is the minimum standard for building a credible business credit file and establishing sufficient history to show your company is credit-worthy. From time to time, some client’s say, “I don’t need 10 trade lines.” The answer to that question is important, while you may not need 10 trade lines now operationally, you may in the future as you grow, but more importantly, your business credit file needs 10 trade lines regardless of your operational needs. In other words, 10 trade lines is a minimum goal that you need to establish if you really want to build a business that is a safe-risk from a lenders perspective. Managing 10 trade lines can be a busy task, so make sure that you use them regularly and make the payments on time, missing just one payment can be detrimental to your overall business credit score.

Vendor Credit Lines

Starter Vendor That Reports to Small Business Equifax

28. February 2012
A supplier that is willing to extend credit to startups and/or businesses with little to no credit history is considered a Starter Vendor. These particular vendors are ideal during the beginning stages of the credit building process.   Remember, it’s important to ensure that you are establishing credit with all three main bureaus. So for the purpose of getting listed with Small Business Equifax consider applying for credit with Strategic Network Solutions. They make a great Starter Vendor and are actually integrated within the Business Fundability System.   This starter vendor caters to a company’s computer and Information Technology (IT) needs. Not only do they offer a wide variety of products that are all computer, electronic, and productivity related but best of all your payment experience is reported to Small Business Equifax.   Once you open an account you can purchase items like Android Tablet PCs, Web Cams, computer monitors, printers, network cards, switches, and productivity software.   Another benefit to using this starter vendor is after a couple of positive payments on item(s) that your company purchases from its store, you would be eligible for a no personal guarantee reporting hardware lease.   As you know a lease is another type of financing that can further help your company establish its diversity of credit on its profiles. With a hardware lease you can avoid shelling out large sums of cash for major computer purchases which allows you to conserve cash flow. Some of the other IT Services offered by Strategic Network Solutions include Endpoint Security, Business Continuity, and Disaster Recovery.   To apply for a net 30 account here is the approval criteria:   Business bank account Federal Tax Identification Number Business address DUNS Number   Upon submitting your application with them, they will provide you with instructions on how to use your new credit line. Now keep in mind once you open an account, you should make regular purchases. Your report needs to reflect that your company can handle its financial obligations on a regular basis. A single purchase will not establish payment history nor will it show that your company can handle ongoing invoices.   Remember, it takes up to 30-60 days for your trade line to show up on your Small Business Equifax credit report from the date of purchase. You can also use this starter vendor as a trade reference on your Dun and Bradstreet credit file.   Starter vendors are a great way for you to begin building your Business Credit Asset™ but make sure you select suppliers that can provide the products and/or services your business needs.

Vendor Credit Lines