Don’t Let Bad Credit Sink Your Business: Recession Vendor Credit Can Pull You Out of the Quicksand

How Recession Vendor Credit Can Be a Lifeline Out of Mud and Muck

You’re trying to sleep but anxiety is creeping in.  You can’t shake the cold feeling in the pit of your stomach.  The recession hit and you are about to start sinking fast.  What can you do?  Is there any hope?  Your personal credit can only hold so much, and it won’t last for long the way things are going.  The business credit situation isn’t great either.  You need to find a vine so you can pull yourself out of this mess.  That is exactly what recession vendor credit can do, if you know how to use it.

Bad business credit is like quicksand.  It can pull you down and choke the life out of your business before you can think.  The more you struggle the deeper you sink.  How can you possibly pull your business out of this sticky situation?  Reach for the vine of recession business credit.  Not only can it help rebuild and repair damaged business credit, it can start you on the path to stronger business credit than you have ever had.  If you don’t have business credit, then recession vendor credit can help you establish it.

Learn more here and get started toward building business credit attached to your company’s EIN and not your SSN. Get money even in a recession! 

The vendor credit tier of business financing offers terms that count as credit, and reports payments to credit agencies.  This allows you to establish and build business credit that will get you out and keep you away from more business finance quicksand.

To fully understand the vendor credit tier however, you need to know what it is, and how it fits in to the other business financing tiers.

The Recession Vendor Credit Vine Hangs Low

If you are sinking in quicksand the first thing you have to do is stop struggling.  The more you struggle the faster you sink.  You do not reach for vines and branches that are too high.  The low hanging vine that is easy to get to is really the only option you have.  Recession vendor credit is easy to recognize because, unlike the other credit tiers, it is going to be easy to grab a hold of from right where you are.

Start Vendors

This is a low hanging vine that you need to grab to build your business credit. Even if you do not have business credit at all when you first start, it will still work. In fact, it may work better from the beginning.  However, this vine can pull you out of a bad credit mess as well.

Starter vendors are the businesses from which you purchase the things you use day to day in your own business. It may be inventory, raw materials, office supplies, or any number of things. They offer terms such as net 30, meaning you get 30 days from the date of purchase to pay for the items purchased.  Some vendors offer net 15, net 60, or even net 90.

In the end, they report your payments, or lack thereof, to credit agencies. The beauty is they do not require a credit check typically, meaning if you handle things properly, they offer an opportunity to build business credit from the ground up.

Store Credit

Once there are 3 or more vendor trade accounts reporting to at least one of the CRAs, you can start to reach for some of the higher vines, like store credit. These are service providers like Office Depot and Staples.

Only use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, use the company’s EIN on these credit applications.

There are several options that report to various credit reporting agencies.  For example, Lowe’s reports to D&B, Equifax and Business Experian. They want to see a D-U-N-S and a PAYDEX score of 78 or more.  If you have handled your recession vendor credit properly, this will be no problem.

Fleet Credit

Are there more accounts reporting? Then you can reach for the next higher vine, fleet credit. These are companies like BP and Conoco. Use this credit to purchase fuel and vehicle maintenance. Just use your Social Security Number and date of birth on these applications for verification purposes. For credit checks and guarantees, make sure to apply using the company’s EIN.

Shell is an example of a company in this tier.  They report to D&B and Business Experian. They want to see a PAYDEX Score of 78 or more and a 411-business phone listing.

Shell might say they want a certain amount of time in business or revenue. However, if you already have adequate recession vendor credit, that won’t be necessary. You will still be able to get approval.

General Credit Cards

Have you been responsibly handling the credit you’ve gotten up to this point? Then keep reaching for higher vines and get yourself out of the muck for good.  General credit cards include businesses such as Visa and MasterCard. Only use your Social Security Number and date of birth on these applications for verification purposes. For credit checks and guarantees, use your EIN.

 

Learn more here and get started toward building business credit attached to your company’s EIN and not your SSN. Get money even in a recession! 

Additionally, they want you to have an established company.

How to Make Starter Credit Work for Your Business

Using recession vendor credit doesn’t help you at all if you are operating under your personal credit. You have to establish your business as its own entity before it can build its own credit. It’s much easier to stay out of the quicksand, but if you do fall in, knowing what to do is essential.  It also helps if you have been working out and have a solid core to help pull yourself up.  When it comes to business credit, these are the things you must do to build your core:

  • Incorporate your business (or at least begin operating under a DBA)
  • List separate business contact information in directories
  • Obtain an EIN and D-U-N-S number
  • Open a bank account in your business name and run all business expenses through that account.

These steps will help you establish your business as an entity with finances separate from your own. That means vendors will report credit information in your business name. Thus, your business credit will be born. This is the foundation of your strong core and what will help you begin the process of pulling yourself out of a sticky credit situation.

Now, who are these vendors that can save you?   We picked a few of the best to highlight, but the list isn’t exhaustive by any means.

Grainger Industrial Supply

Grainger sells power tools, pumps, hardware and other things. In addition, they can handle maintenance of your auto fleet. You need a business license and EIN number to quality, as well as a D-U-N-S number from Dun & Bradstreet.

Quill Office Supplies

Quill is the ultimate starter vendor . They sell office supplies as well as cleaning and packaging supplies. Products range from office furniture and printer ink to snacks and coffee.

Uline Shipping Supplies

Uline reports to Dun & Bradstreet and carries shipping boxes, trucks, dollies, janitorial supplies, and more. Initially, you may need to prepay. After that, they are likely to approve you for Net 30 terms.

Behalf.com

Behalf is way of getting paid through an app, but they also offer funding. The more you have your customers pay you through Behalf, the more likely they are to offer you favorable terms when it comes to funding.

Avoid the Quicksand All Together

Once you are out of muck and safe, don’t jump right back in. Stay on solid ground and on top of your business credit. How do you do this when quicksand can sneak up on you so quickly?  It’s not as hard as it sounds.

If you are working with recession vendor credit, be certain to make payments on time or early. Then, monitor your credit. When you see things moving in the right direction, keep moving up the vines and building strong business credit.

Don’t become a victim of credit agency mistakes. If you see a problem on your report, signal for help. Let them know about the mistake in writing, give them the correct information, and provide documentation. Don’t send originals though. Be sure to make copies and keep the originals for yourself.

Learn more here and get started toward building business credit attached to your company’s EIN and not your SSN. Get money even in a recession! 

You should note that it is isn’t as easy to monitor business credit as it is to monitor personal credit. You can get a free personal credit report annually, and you can monitor your score and changes in your report through several free websites.  It costs money to monitor your business credit score.  There is no way around it.  However, we can help you monitor business credit at Experian and D&B for 90% less than it would cost you with the credit reporting agencies.  Find out how at www.creditsuite.com/monitoring.

Grab the Recession Vendor Credit Vine: Don’t Let Bad Business Cause Your Business to Sink

If you know it’s there and are watching out for it, quicksand is totally avoidable. Unless, of course, you find yourself in a COVID-19 situation.  Then, you may very likely be pushed in before you even know what is happening. Bad business credit is also avoidable and fixable, even in a recession. It may take some time, but you can establish and build great business credit following the process, starting with recession vendor credit.

Start with starter vendors and work your way up to traditional financing.  If you trust the process, your business can thrive. Be careful not to move too fast. Start slow. If you move to quickly you could be sinking before you know it. When it comes to building business credit, slow and steady wins the race.

What does it mean to take it slow? Don’t bite off more than you can chew. Do not take on more credit than you can handle. Know your limits, and pay attention to the market. If you move to fast when trying to get out of quicksand you are just going to sink faster.  You have to stop struggling and move with slow, controlled movements. Any progress is progress toward where you want to be, meaning you are getting closer no matter how slowly you are moving.  Just keep moving in the right direction.

The same is true of building a business. You don’t have to move quickly, you just have to keep moving in the right direction.

 

 

 

 

 

 

The post Don’t Let Bad Credit Sink Your Business: Recession Vendor Credit Can Pull You Out of the Quicksand appeared first on Credit Suite.

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