How to Build Business Credit in 2024 | Net 30 | Easy Approval Vendors

Summary

In this video, Kelvin shares an updated guide on how to build business credit in 2024. He explains the difference between business credit and corporate credit, emphasizing the importance of establishing a solid credit foundation for securing business funding. Kelvin walks viewers through the essential first steps, including using Net 30 vendors like ULINE, Quill, and eCredable Business Lift, and introduces several recommended tier-one credit cards and lines of credit. He also highlights strategies for building strong business credit with no personal guarantee and how to increase your credit limits over time. Perfect for entrepreneurs looking to scale their businesses and secure funding.

Takeaways

• 😀 Establishing business credit in 2024 is crucial for securing business funding like loans, credit cards, and more within 3-6 months.
• 😀 Business credit differs from corporate credit—business credit is extended to an individual for a business, while corporate credit is based on a business's creditworthiness and doesn’t require a personal guarantee (PG).
• 😀 A personal guarantee (PG) means the vendor checks your personal credit report, and you are personally responsible for the debt, which can impact your personal finances.
• 😀 Start building business credit with Net 30 accounts, which give you 30 days to pay invoices. These are reported to major credit bureaus, helping establish your credit history.
• 😀 Nav Prime is a recommended Net 30 vendor that helps monitor business credit scores and provides financial insights. They offer a paid subscription to access detailed reports.
• 😀 ULINE and Quill are excellent choices for purchasing business supplies on Net 30 terms. Both companies report your payments to major credit bureaus like Dun & Bradstreet, Experian, and Equifax.
• 😀 eCredable Business Lift allows businesses to convert regular bills (like utilities and rent) into credit trade lines that are reported to credit bureaus, boosting credit scores over time.
• 😀 Revolving accounts, such as the Nav Prime Card, help build business credit while managing everyday expenses. Nav Prime’s card links to your business checking account and pays off balances automatically.
• 😀 The Bank of America Secured Business Credit Card is a great option for startup businesses. It requires a deposit, reports to major credit bureaus, and can graduate to an unsecured card over time.
• 😀 The Sam’s Club MasterCard is a corporate credit card that requires no personal guarantee, making it an ideal option for building business credit. It also offers cash-back rewards and can be used at Walmart.
• 😀 The WEX Fleet Card is beneficial for businesses that have vehicles. It helps build credit while providing fuel discounts at numerous gas stations across the U.S.
• 😀 To successfully build business credit, start with foundational accounts that report to all major credit bureaus. Ensure that you maintain at least three Net 30 accounts with timely payments to qualify for higher credit limits in 3-6 months.

Q & A

What is the difference between business credit and corporate credit?

Corporate credit refers to lines of credit extended to a business entity (EIN only or no personal guarantee). Business credit, on the other hand, is credit extended to an individual on behalf of their business, which may involve a personal guarantee.

What does 'no PG' mean in the context of business credit?

'No PG' stands for 'No Personal Guarantee.' This means that the vendor or lender will not check your personal credit or hold you personally liable for business debts.

Why is it important to have at least three Net 30 accounts when starting to build business credit?

Having at least three Net 30 accounts that report to major credit bureaus (Dun & Bradstreet, Experian, and Equifax) is essential for establishing a strong business credit foundation. It shows consistency in payments and helps build a solid credit history for your business.

What is a Net 30 account?

A Net 30 account is a line of credit extended by a vendor to a business, giving the business 30 days to pay its invoice in full. Timely payments can help improve your business credit score.

What are the benefits of using Nav Prime for business credit building?

Nav Prime is a business credit monitoring service that provides access to business credit reports and scores from major bureaus (Experian, Equifax, and FICO SBSS). It helps you monitor and improve your credit, access financial recommendations, and track your business's creditworthiness.

What types of business supplies can be purchased through ULINE and Quill with Net 30 payment terms?

ULINE and Quill offer a wide range of business supplies, including cleaning materials, retail, and shipping supplies. You can purchase these items through their Net 30 payment terms, which will be reported to major credit bureaus to help build business credit.

How does eCredable Business Lift help businesses build credit?

eCredable Business Lift allows businesses to link bills and expenses (e.g., utilities, rent, mobile services) to their platform. These payments are reported to business credit bureaus, helping to establish multiple trade lines and improve the business's credit score.

What is the benefit of a secured business credit card, like the Bank of America Business Advantage card?

The Bank of America Business Advantage card is a secured business credit card that requires a deposit but reports to major business credit bureaus, helping to establish business credit. It also offers potential for future upgrades to unsecured cards, as well as rewards like cash back.

How does the Divvy (Bill Spend) card help businesses manage expenses and build credit?

The Divvy card allows businesses to manage their expenses with both physical and virtual cards. It reports to major credit bureaus, helping to build business credit while offering automatic weekly payments to cover all expenses, avoiding high balances and missed payments.

What are the advantages of using the Sam's Club MasterCard for business credit building?

The Sam's Club MasterCard allows businesses to build credit without a personal guarantee. It offers cash back rewards (5% on gas, 3% on dining, and 1% on other purchases) and reports to Dun & Bradstreet and Equifax, making it a valuable tool for new businesses.

What is the WX Fleet Network and how does it help businesses build credit?

The WX Fleet Network, including the Shell Fleet card, is a gas card program that helps businesses build credit by allowing them to purchase fuel at a variety of gas stations. It reports to major credit bureaus, contributing to the business's credit profile.