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The easiest and fastest way to start building a strong business credit profile is with vendor credit. Typically, this will be a Net 30 account. Still, you will find some Net 60 vendors, and even some invoice payment terms of Net 90 and up.
This is credit directly from the supplier or service provider rather than a financial institution. The net payment terms mean that the account must be paid in full in that amount of time.
So, a Net 30 account will be due in 30 days, and Net 60 vendor accounts need to be paid in full within 60 days.
The Best Net 60 Vendors
There are plenty of Net 60 vendors out there. However, they are not all created equal.
Some of these accounts are easier to get than others. Furthermore, some of them will report payments to the business credit reporting bureaus, helping build good credit history, and thus a strong business credit score.
However, not all of them report. Also, some of them report to your personal credit rather than business credit.
Worse yet, some of them will report negative payment history, but not positive.
Some vendors require an established credit score before they will extend credit. The vendors that will extend credit without a credit check and report payment are often called starter vendors.
Here are some great Net 60 vendors, along with everything you need to know about each one.
Amazon Net 55
Obviously, these payment terms are not Net 60, but Net 55 is pretty close. With an Amazon business account, you can buy virtually anything your business needs.
Then, since the net terms are 55, you have 55 days to pay off the balance. Since you are paying in full, there is no interest, ever.
There is also no annual fee with this Amazon trade credit account.
You get a monthly statement with details such as an invoice, purchase order, and SKU, making it easier to track and record spending.
Another great perk of this business account is the ability to set up separate accounts under your organization’s total credit line.
You can set up a sub-vendor credit account of sorts for various departments, locations, and companies.
On-time (or early) payments on this account will help build your business credit. Amazon reports these payments to Dun & Bradstreet and Equifax.
This wholesale supplier bases its inventory on what’s currently trending. Most of their customers are boutique shop owners. As such, managing cash flow to buy merchandise may be tricky.
They offer net 60 payment terms. This allows businesses to order what they need and pay later. To access trade credit, a small business has to apply through Rumbleship. There is no credit check. You can even apply during checkout!
Be sure to pay the invoice in full by the due date. Then you will not have to pay interest, fees, or penalties. According to them, most licensed small businesses qualify.
This vendor sells products to small businesses and offers a net 60 program as well. They specify that they do not accept online customers. Their net 60 terms are available to brick-and-mortar storefronts only.
Their process for determining a vendor account credit limit varies. But, your payment history and sales are usually a consideration. They may also consider the type of business you own and where it is. Bank information can also come into play.
A small business will pay no interest, fees, or penalties as long as they pay on time.
Those that order from Abound will find that there are some minimums, but they can be as low as $30.
They do work with online stores as well as brick-and-mortar, but not third-party marketplace sites, like Amazon.com or eBay.com.
There is free shipping for the first 72 hours, and then it is no more than 15% of the total order.
They also offer free returns in select categories for the first time you try out a new brand.
Those that qualify can apply when setting up their account. Any remaining invoice balance after 60 days will be charged to the credit card on file.
There are no fees, interest, or penalties when using net 60 terms.
The Plum Card from American Express
The Plum Card is not a vendor account per se. It is what is known as a corporate card. It has the flexibility of a credit card, as in you can use it anywhere, not just a specific vendor. But, it has net terms like many vendor accounts.
This card wants to give small business owners a way to better manage cash flow by extending payment terms.
The payment terms are Net 60, but if you can pay before the 60 days are up, there are benefits. This American Express card offers unlimited 1.5% cash back on purchases that are paid for within ten days of your statement closing date.
Brex eCommerce Card
This option offers limits that can exceed that of typical corporate cards by up to 20 times. They base approval and credit limits on the financial information of the business. This includes cash available, spending patterns, and more.
The balance has to be paid monthly. So, this is actually Net 30 terms. Similar to the Plum Card, this account is not limited to a specific vendor.
Brex used to offer Net 60 terms on this credit card to new customers, but that recently ended. Since they still have grandfathered customers with Net 60 payment terms, it may be negotiable after establishing a relationship with them.
Better yet, there are rewards options. A few of these include:
- Cash back
- Statement credit
- Gift cards
Get cards for your team members for free! You can set individual spending limits. With this type of business account, managing spending is much easier.
They also offer virtual card options for online spending. Brex integrates with common accounting programs that include Quickbooks, Xero, NetSuite, and Gusto, among others.
Build Your Business Credit
The steps you take to build a business credit profile are the same ones necessary to lay a fundable foundation for your business. Some of the things that make a difference will probably surprise you.
- You need an EIN
- You need to incorporate
- A separate business bank account is a must
- Even your business name and NAICS codes can make a difference!
Something as little as your business address, phone number, or email address can cause problems with fundability. Your address has to be a physical address where you can receive mail. For example, don’t use a P.O. Box or a UPS Box.
Your phone number should be toll-free and listed in the 411 directories. You can have it forwarded to your personal phone, but you need a separate business phone number.
Also, a business email address is necessary. But, you need to be sure it has the same URL as your business website. Do not use a free option like Yahoo or Gmail.
Your website needs to look professional and work well, and you need to pay for hosting. If a lender looks at your website, you want to make a good impression.
You Have to Apply for a D-U-N-S Number
Dun & Bradstreet is the largest and most commonly used business credit agency. You cannot have a business credit profile with them without a D-U-N-S number.
That means your business will have no Dun & Bradstreet business credit report. Since lenders use it often, this is one of the business credit bureaus you definitely want a profile with. It’s free to get one on their website.
The other two of the big three business credit bureaus are Equifax and Experian Business.
How Do Net 60 Vendors Help?
Vendor credit as a whole can help build your business credit, whether they are Net 60, a net 30 vendor, or something else entirely.
Even a credit card can help. The key is not in the payment terms, but in whether or not they report positive payment history to the business credit reporting bureaus.
Get CreditStrong Business
The CreditStrong credit builder program is an account that combines a cash-secured commercial installment loan and a commercial savings bank account. There are four different program options for building business credit.
All of these plans are for 25 months. The amount you pay per month is dependent on the plan you choose. For example, there are plans for $5,000 and $10,000. You can then decide between plans with interest rates or not as well.
Keep in mind that you do not receive loan proceeds. There is no actual funding involved. Rather, the funds from the loan are deposited into the savings account as collateral for the loan.
You are not able to access the funds in the savings account for the life of the loan.
As you start to make payments to CreditStrong, they then report your payments to PayNet, Equifax, and the SBFE. Which in turn, begins to build your business credit!
Read our full editorial CreditStrong Business Credit Review.
Get Nav Business Boost
Nav offers small business financing and business credit report monitoring. Though they have a free service, if you choose one of their paid services you get more options.
Their Business Boost subscription reports monthly payments to the D&B, Experian, and Equifax business credit bureaus so that you have an account reporting positive payment history. This can offer a boost to your business credit score.
Read our full editorial Nav Review.
How to Build Your Business Credit with Net 60 Vendors
The only way Net 60 vendors can help you build business credit is if the supplier reports your on-time payments to the business credit reporting agencies. Unfortunately, some only report missing or late payments. They do not report positive credit history.
It can be difficult to determine which vendors report, as they do not always advertise that fact. This is where a service can come in handy when you want to build business credit.
These services track vendors to determine first if they offer credit, then if they report positive payment history.
Net 60 accounts can help your business in a lot of ways. In addition to growth, they can aid in cash flow and expense management.
And, if you handle the credit responsibly and choose the right accounts, they can also help you build a strong business credit score as you build a positive payment history. Then, you will have access to the funds you need, when you need them.
- How To Build Business Credit Without Using Personal Credit
- Tier 2 Business Credit Vendors
- Tier 1 Business Credit Vendors
- Business Credit Builder
- Companies That Help Build Business Credit
Faith is the Senior Content Writer at Credit Suite. She has a BBA with a Major in Accounting and over 20 years of experience in the fields of finance, accounting, and small business credit. She lives with her husband, son, two daughters and two dogs in Tennessee.