WHAT IS THE BUSINESS LINE OF CREDIT PROCESS?
If, after looking over the finances for your company you, decide that it may be advantageous for you to get a line of credit then you know doubt need to know what the business line of credit process is. Although there is no one established process for all institutions there are some milestones which are common to most and we will be discussing. Most companies before dispersing a line of credit will require that they look over your financial and accounting statements to see if your company is viable and likely to be able to repay a loan. Typically they will be looking at some of your hard costs as well as your month-to-month operating costs to determine how much funding you have free to repay them. This will establish a baseline from which they will operate in deciding whether or not to offer you a line of credit and if they do offer you a line of credit how much credit they will extend to your company. So it is important to have all of your paperwork in order before seeking out funding. Which leads us to the next step in the business line of credit process.
Once they have established a baseline for how much money could be available to you the next step typically in a business Line of credit process is to determine your overall credit worthiness. And also to decide what assets will be necessary to back the line of credit if it is determined that your credit is not good enough to get an unsecured line of credit. At this time other details such as the interest rate for the credit line and the amount which you can use will also be determined. Consider for a moment that this process is similar to this process you go through if you wanted a personal credit line. You also need to make sure that your business documentation is organized and easy for you to obtain, because if it is not, that will not leave a good impression in the lenders mind. And this is just as important as having top-notch financials. You always want to make sure that you leave a good impression on your potential lender. You’ll find it easier to not only get what you need in terms of credit; you’ll be able to get larger loans the longer you remain a good customer. This is something that many business owners don’t take into consideration and yet it is very important.
DEFINITION OF NET 30
Net 30 is a form of trade credit which specifies that the net amount (the total outstanding on the invoice) is expected to be payment received in full 30 days after the goods are dispatched by the seller, or 30 days after the service is completed. Net 30 terms are often coupled with a credit for early payment; e.g. the notation “2%” 10, net 30” indicates that a 2% discount can be taken by the buyer only if payment is received in full within 10 days of the dispatch of the goods, and that full payment is expected within 30 days . For example if “$1,000 2/10 net30” is written on a bill, the buyer can take a 2% discount ($1,000 x .02 = $20) and make a payment of $980 within 10 days.
Net 30 is a term that most business and municipalities (federal, state and local) use in the United States. Legally speaking Net 30 means that buyer will pay seller on or before the 30th calendar day (including weekends and holidays) of when the Goods were dispatched by the Seller or the Services were fully provided. Transit time is included when counting the says, i.e. a purchase in transit for 7 days before receipt was just 23 additional days until payment is due to the seller. Net 30 payment terms typically have an interest penalty for not meeting those terms and they being accruing on the 31st day after dispatch.
ESTABLISHING YOUR BUSINESS CREDIT / COMPANIES THAT OFFER NET 30 TERMS
ESTABLISH YOUR INITIAL ACCOUNTS - Once you have everything that is required to apply for credit you can go about establishing your initial accounts, before you go applying everywhere think again. This is a slow process and your business credit might be flagged or even blocked if you apply to too many places at once, I recommend that you start out with 6 to 8 companies on NET30 terms. Below is a list of companies that offer NET30 Terms. Purchase a small initial order from each of these companies that approved you for NET30. Pay your invoice off well before its due date as that is a consideration when your D&B Paydex Score is calculated.
BP - 800-348-7959
Branders - 650-350-7064
Grainger - 1-888-361-8649
JC Penny Commercial - 1-800-527-4403
Mobil Gas Commercial - 1-800-950-6095
Nebs - 1-888-823-6327
Neiman Marcus Commercial - 1.800-685-6695
Nordstrom’s Commercial - 1.800.446.4500
Office Depot - 1-800-767-1358
PCM (Formerly PC Mall) - 1-800-504-8218
Pitney Bowes - 203-356-5000
Quill - 1-800-982-3400
Rapid Forms - 1-800-257-8354
Reliable – 1-800-359-5000
Sam’s Club Commercial - 1-800- 203-5764
Seton - 1-800-571-2596
Shell Commercial - 1-888-335-8423
Staples Business - 1-800-282-5316
Tech Depot -1- 800-625-9866
Texaco Commercial - 1-866-435-3201
U-Line – 1-800-295-5510
UPS - 800-742-5727
Walmart Commercial 1-877-294-7548
Wearguard (Aramark) - 1-800-388-3300
NOTE: Some vendor applications offer Business Liability Applications as an option over personal guarantee applications. Please check each respective website for exact details.
Business Profile Builders
VENDOR LIST & REQUIREMENTS 1.BEST BUY Business Advantage Account 1-800-373-3050 Requirements:http://www.bestbuybusiness.com/bbfb/en/US/adirect/bestbuy?cmd=BBFBCreditInfoPaydex: Yes 65+
2.GRAINGER (310) 327-7370 Requirements:http://www.grainger.com/medias/sys_master/hd0/h93/8919739531294.pdfPaydex: NoNet 30-full balance. $1,000 min. credit limit, business license needed along with 1 banktrade and 2-3 other trades. Reports to D&B, but not to Experian.
3.HOME DEPOT COMMERCIAL ACCOUNTS (800) 685-6691 Requirements:http://www.homedepot.com/c/SV_CC_Commercial_Credit_MainPaydex: No (if 75+ paydex, you will get an account as a young business)2 years in business. Revolving account and/or net 30. Apply on-line. Reports to D&B andExperian.4.JC PENNYS 1-800-527-4403https://www.onlinecreditcenter2.com/eapplygen2/load.do?cHash=1342177401&subActionId=1000
JC PENNY Credit Card Program Terms
https://www.jcpcreditcard.com/JCPenney/occ-usage.html
COMPANIES THAT OFFER REVOLVING CREDIT
Here is a list of companies that offer credit on revolving terms.
1.Walmart Business Credit by GE Capital Retail Bank: 1-877-294-754
https://www.onlinecreditcenter4.com/EApplyCommercial/load.do?cHash=9941244770
2.Sam's Club Business Credit Card by GE Capital Retail Bank under license from Discover FinancialServices 1- 800- 203-5764
https://www.onlinecreditcenter4.com/sams/dualcard/SC_BUS_DualApp.pdf
3.Dell Business Credit (Dell Financial Services DFS) 1-866-413-3355
https://financing.dell.com/payments/financing.aspx?s=bsd&l=en&cs=04&c=us&#sbf_app~esewrka542q0jr54tkqj2hzm
4.Amazon Corporate Credit Line 1-866-712-3174
http://www.amazon.com/gp/cobrandcard/marketing.html?pr=ibprox&inc=def&place=url
5.US Bank Skypass Visa 1-866-286-VISA
https://applications.usbank.com/oad/begin?locationCode=8159&productId=27&sourceCode=55872&theme=usbank
6.Target Business Card 1.800.440.5317
7.http://img3.targetimg3.com/wcsstore/marketing/com/online/images/redcard/pdf/tb_web_app_020911.pdf
GAS CARDS: (NOTE website links are active as of 4/20/2015)
1.Shell Fleet Card By Citigroup (Citibank)
To apply for an account with only Business liability, you may not submit an onlineapplication and must apply over the phone by calling 1-888 987-4355, Monday-Friday9:00am to 7:00pm ET or by downloading a business liability application.
Exxon / Mobile
You are eligible to apply for an account with only Business liability if you are any one of thefollowing: Corporation with more than $1 million annual sales and in business for at least 3years, Government entity or Non-Profit Organization.
To apply for an account with only Business liability, you may not submit an online application and mustapply over the phone by calling 866 544-3086, Monday-Friday 9:00am to 7:00pm ET or by downloadinga Business Liability Application.
https://www.citicards.com/cards/acq/Apply.do?screenID=3276&app=UNSOL&siteId=PLOF_EXXONMOBIL&langId=EN&sc=20415&mfl=false2.Chevron and Texaco Business Card 1-888-243-8358
To apply download the application: https://www.chevrontexacobusinesscard.com/Files/WEB-USA-ALL.pdf and fax back to 1-866-435-3795 (Fax Number)3.Sunoco Corporate Fleet Card By Citigroup (Citibank) 1-800-935-3387With the Sunoco Corporate Card, you'll pay no monthly, annual or per-card fees as of 1/3/2014To Apply Online:https://www.accountonline.com/ACQ/RPL/Web/Apply?&app=UNSOL&sc=20086&siteId=PLOF_SUNOCO&langId=EN&mc=SNX9 4.ARCO Business Fleet Card - 1-800-348-7959
https://www.fleetcardsusa.com/arco/register?productID=30&securecheck=true
REVOLVING AND NET 30 COMPANIES
1.SEARS COMMERCIAL ONE (800) 917-7700 Requirements:Paydex: No (75+ will allow you to get one as a young business)2 years in business, revolving acct, net 30, call to get application faxed to you.Reports to: D&B and Experian. Fax completed applications to1-800-599-9709
http://www.citibank.com/us/cards/srs/apps2dwnld/commercial1.pdf
2.SPEEDWAY SUPER AMERICA FLEET GAS CARD 1-800-428-4016 Requirements:Paydex: NoNet 30-full balance, at least 1 year in business.
https://secure.superfleet.net/Credit/Application.aspx
3.STAPLES BUSINESS ACCOUNT (800) 669-5285 Requirements:Paydex: NoRevolving and net 30 available. Reports to D&B and Experian.
https://www.citicards.com/cards/acq/Apply.do?screenID=3272&app=UNSOL&siteId=PLCR_STAPLES&langId=EN&sc=20150&mfl=false
NOTE: Some vendor applications offer Business Liability Applications as an option over personal guarantee applications. Please check each respective website for exact details.
WHAT IS A PAYDEX?
Paydex is a term used in business, for a numerical score granted by Dun and Bradstreet to businesses as a credit score for the promptness of their payments to creditors. The Paydex score is used for commercial organizations in a manner similar to the way the FICO score is used for individuals.
While individual credit scores take a number of factors into consideration, Paydex is calculated based one single factor – whether a business makes prompt payments to its suppliers and creditors within the agreed upon perms of payment.
The Paydex Score ranges from 0 to 100 (best). A Paydex of 80 or higher is considered healthy for a company – that is a company paying its suppliers and vendors on time, before they are due, or past due. Today most lenders and suppliers are looking for a score of 75 or higher.
HOW TO IMPROVE YOUR PAYDEX SCORE?
The best way to raise your Paydex score is to frequently pay all of your bills early whenever possible. In order to raise your score beyond 80, you must pay ahead of time since your score is directly related to how you pay your bills.
For example, a Paydex score of 81 tells the prospective suppliers (or lenders) that you’re always paying 2 days sooner than the terms. In other words, if your creditor gives you 30 days to pay, make an effort to pay 10 days in advance. Such practice will push your score above 85.
Yet another effective strategy to raise your score is to apply for a secured business credit card to pay for small business expense. What’s more important here is the practice of paying your credit card balances ahead of time – consistently. By doing so, you can improve your score in just a few months.
COMPANIES THAT REQURE 6 MONTHS IN BUSINESS AND PAYDEX SCORE WITH NO DELINQUENCIES - CALL TO APPLY or GO ONLINE
1.LOWES Business Account Application (800) 445-6937 Requirements:Paydex: No (75+ will allow you to get one as a young business)Revolving account or net 30. 3 years in business. Reports to D&B only.
2.https://apply.lowes.com/EApplyCommercial/load.do?cHash=5468598762&langId=en&siteCode=LMHPLBAE1
3.MACYS (800) 933-6229 Requirements:Paydex: No(75+ will allow you to get one as a young business)2 years in business and some credit history. Call to have application faxed to you. Reports toD&B and Experian.
4.NORDSTROMS (800) 964-1800 Requirements:Paydex: NoNet 30-full balance, 3-4 trades, verify 2 (trades should be net 30 accounts as well) call forapplication. Reports to D&B and Experian.
5.OFFICE DEPOT (800) 729-7744 Requirements:Paydex: NoRevolving account, Net 30. Must be incorporated. Print on-line and fax. Reports to D&B andExperian.https://www.citicards.com/cards/acq/Apply.do?screenID=3225&app=UNSOL&siteId=PLCR_OFFICEDEPOT&langId=EN&sc=20008&mfl=false
6.ORCHARD SUPPLY 1-800-696-4674
Paydex: NoNet 30, 3 trades with at least 3 months activity and 1 bank trade. For questions regarding yourOrchard Supply Hardware commercial credit card contact: 1-888-746-7674
http://www.osh.com/businessaccount
7.PHILLIPS 66 CONOCO 76 COMMERCIAL CARDPHILLIPS 66 FLEET CARD To apply, please call 1-877-685-0330Duns report pulled, 3 trades, 1 bank trade needed. Reports to D&B.https://www.onlinecreditcenter2.com/EApplyCommercial/load.do?cHash=140526283014
Business Profile Builders
THE IMPORTANCE OF 411 DIRECTORY LISTING
Why is getting your business listed in the 411 directory such a vital part of the business credit building process?
Does it really matter whether or not your company is in the White pages or registered with Directory Assistance?
Absolutely!
As a matter of fact you can expect to have a much harder time getting approved for business credit without one. The reason, when applying for credit with a supplier or creditor one of the very first things checking is to verify the legitimacy of your company whether or not you have a 411 business listing. A non listed business will automatically trigger a red flag with most creditors and result in a denial of credit. So in order to avoid getting turned down you should first verify whether or not your company is listed prior to apply for credit.
