FICO® SBSS℠ Score — A Key SBA Loan Credit Score Explained
There’s a FICO credit score designed just for small business: the FICO® SBSS℠ score. Banks, business credit card issuers, and other lenders may use it to help make lending decisions. The U.S. Small Business Administration (SBA) requires lenders to use this score to pre-screen borrowers for some of the SBA loans it insures.
Just as your personal FICO credit scores can impact your ability to secure financing, your business FICO SBSS score can impact your ability to get small business financing.
What Is a FICO SBSS Score?
FICO® LiquidCredit® Small Business Scoring Service℠ (FICO® SBSS℠ score) is a small business credit score lenders may use. Created by the Fair Isaac Corporation, it’s a credit score small business owners should know about if they are considering a small business loan through a traditional lender such as a bank, or certain SBA loans. But many entrepreneurs have never heard of it, in part because it’s traditionally been hard to access.
Banks aren’t required to disclose that they use the FICO® SBSS℠ score and FICO doesn’t sell this score to borrowers as it does with consumer scores that it sells through myFICO.com.
Business lenders use this score (and other business credit scores) to help evaluate credit risk. Credit scores can help them make faster, more accurate lending decisions for term loans, lines of credit, equipment loans and other types of small business loans. Lenders may use scores for loan approval, as well as to decide the size of a credit line and interest rates.
It can help them make decisions in hours, not days.
What Is a Good FICO SBSS Score?
The FICO SBSS score ranges between 0 to 300, with 300 being the highest score. A higher score indicates lower risk.
SBA Small Loans require the lender to prescreen the application using a FICO SBSS score. The current minimum SBSS score for 7(a) Small Loans is 155.
(SBA Small Loans are loans for $500,000 or less, but not including SBA Express, Export Express, CAPLines, Export Working Capital Program (EWCP), and Community Advantage Pilot Program loans.)
If your score falls below their required threshold, it doesn’t necessarily mean your application won’t be approved. To continue, your loan application then must go through a manual approval where other factors may be taken into account.
How is the SBSS Score Calculated?
FICO doesn’t have any credit information about how consumers or businesses pay their bills; it just creates the formulas used to calculate credit scores. Instead, the information it uses to calculate this business score comes from credit reporting agencies, the lender or other data sources. SBSS models use up to four types of information.
- Consumer credit reports for the principals/guarantors of the business (up to five owners),
- Business credit reports for the business,
- Application data supplied on the loan application, and
- Business financial data
Of these, FICO says the information that is most important in terms of helping predict performance are the business owner’s personal credit data followed by business bureau data, financial data, then application data.
If you have no business credit history and limited time in business, you may be able to get a passing FICO SBSS score based on stellar personal credit alone. But it helps to have strong business credit as well.
Banks and lenders can set up the SBSS model they use in different ways, putting more weight on certain information, and less on others.
For example, it can put more weight on your business credit profile or more on your personal credit history. It’s also a very “smart” business credit scoring model because it can automatically go from one business credit bureau to another, in whatever order of priority the lender prefers, until it’s able to generate a score.
So, if the lender prefers using Experian for business credit data as the default, it can get a credit report from Experian. But if that report doesn’t provide enough information, it can automatically get business credit data from Dun & Bradstreet. If there’s not enough business credit data available, it will just use the personal credit data to calculate the SBSS score, potentially along with business financials.
Currently, a FICO SBSS score can be calculated using consumer credit data from Experian, Equifax or TransUnion as well as business credit data from Dun & Bradstreet, Experian Business or Equifax SBFE.
Application data can include business checking account balance , time as current owner and principal’s combined net worth.
Because the lender has a choice of credit bureaus to use when accessing data to create this score, your business does not have a single FICO SBSS score. In addition, it will change as information in your credit reports change.
How FICO SBSS Works
Here are some important facts to understand about this business credit score:
- FICO SBSS rank-orders small businesses by their likelihood of making payments on time. The FICO score range is 0 to 300. Higher scores are better in that they indicate lower risk but each lender will choose the minimum score it will accept.
- The minimum score to pass the mandatory prescreen for 7(a) Small Loans is currently 155. But most SBA lenders set their minimum score at 160-165.
- The score can be calculated based upon personal and business credit history and other financial information. A strong history of business credit with timely payments to vendors and suppliers may help boost your SBSS score.
- If you have derogatory or no credit history, it can take months or even years of positive credit activity to move your SBSS score significantly higher. It’s vital to build your credit and ensure it’s healthy before you need it.
- Because businesses are not covered by Fair Credit Reporting Act protections, you can be denied business financing due to your SBSS score, and lenders are not required to notify you the score was used or provide access to your score.
Who Uses the FICO SBSS Score?
FICO has reported that the FICO SBSS score is used by over 7,500 lenders nationwide to help them make lending decisions. The latest version of FICO SBSS 7.0 built for loan amounts up to $1 million for term loans and lines of credit, and $250,000 for leasing transactions.
As mentioned earlier, certain SBA loans require this score be used to pre-screen applications. Banks may use it to pre-screen their loan applicants but they usually set their cutoff score higher, typically around 160-165.
How Can I Improve My SBSS Score?
Two of the best ways to improve your business’s FICO SBSS Score are:
- Improve your personal credit scores
- Build business credit or improve your business credit scores
The exact steps you’ll need to take will depend on the information in your personal and/or business credit reports.
Start by reviewing your personal credit scores and make sure yours are as strong as possible. If your business has multiple owners or others who will guarantee the loan, their creditworthiness can be a factor too, so make sure you are aware of any credit problems. Learn about the main FICO score factors for personal credit below.
Strong business credit can help, so check your business credit with Dun & Bradstreet, Experian Business and Equifax. If your business doesn’t have a D-U-N-S number, you’ll want to get one and start to establish business credit. Net-30 vendor accounts and business credit cards can help build business credit.
If you don’t have a business bank account, make sure you get one and use it consistently for business expenses. Your business bank account balance may impact this score, and many lenders require and review business bank statements when making small business lending decisions.
Lastly, build your business. At least two year’s time in business, strong credit and solid financials are key to securing the best small business loans and financing.
What Are the 5 Categories of the FICO Score?
There are five main categories of credit information that affect consumer FICO scores:
- Payment History (35%)
- Debt Utilization (30%)
- Credit History/Credit Age (15%)
- Credit Inquiries/New Credit Checks (10%)
- Types of Credit (10%)
As you can see, payment history—which includes payment history on your accounts like credit cards, car loans and mortgages, as well as negative information like collection accounts or bankruptcy—has the most impact on your credit scores.
If your credit report lists late payments or other negative information, it may help to know that as that information gets older, it tends to have less impact on your credit scores. Eventually, it will no longer appear on your credit reports (usually after 7 years).
Another factor that can significantly impact credit scores is credit utilization. Here, credit score models will often compare your balances on your credit cards to your credit limits. High utilization can affect your credit scores. Fortunately this is a factor that can quickly change by paying down balances, increasing credit limits or even by transferring debt.
What is a Business Credit Score?
Personal credit scores rank creditworthiness of individuals, business credit scores do the same for businesses. Personal credit scores range from 300 to 850. Business credit scores range from 0 to 100. Major business credit reporting agencies Dun & Bradstreet, Experian, and Equifax produce business credit scores and reports. FICO scores for small businesses are known as “FICO SBSS.”
If you try to compare business credit to personal credit, you’re likely to get frustrated. That’s because business credit scores differ from consumer credit scores in some key ways:
Credit Score Ranges: Personal FICO scores range between 300 to 850; business credit scores typically range between zero to 100. Paying on time to lenders and/or creditors is the best thing you can do to establish a good business credit score.
Factors That Determine Business Credit Scores
The following factors may be used to calculate business credit scores. Each scoring model is different, though, so some of these factors may not carry much weight, or may not be used at all.
- Payment history
- Age of credit history
- Debt and debt usage
- Industry risk
- Company size
By far, the most important factor when it comes to business credit scores is payment history: does your business pay its bills on time? Some credit scores are almost exclusively calculated based on payment history.
Business credit score & Score range
Dun & Bradstreet PAYDEX 0 – 100
Intelliscore℠ Plus from Experian 0 – 100
FICO® LiquidCredit® Small Business Scoring Service℠ 0 – 300
Equifax Business Delinquency Risk Score 224 – 580
Intelliscore Plus℠ from Experian
With the Experian Intelliscore Plus℠ scores range from 1 to 100. A Higher scores indicate lower risk, so as a business owner, you want to aim for a higher score.
There are over 800 variables that can go into these scores, including tradeline and collection information, public filings, new account activity, key financial ratios and other performance indicators. But the bottom line is paying on time and managing debt well will help build a strong score.
Note: Experian offers a version of Intelliscore Plus that can evaluate data from the owner’s personal credit report as well as business credit.
FICO® LiquidCredit® Small Business Scoring Service℠
FICO’s Small Business Scoring Service (SBSS) rank-orders applicants by their likelihood of making payments on time. The score ranges from 0 to 300. The higher the score, the better. The scoring can use both personal and business credit data and other financial information. A strong history of business credit with timely payments to vendors and suppliers may help boost your SBSS score. The FICO SBSS score will be used for term loans, lines of credit, and commercial loans up to $350,000 from the Small Business Administration (SBA). The minimum score to pass the SBA’s pre-screen process is currently 140.
How Business Credit Scores Are Used
Lenders and other creditors need a means of determining how well your business repays debts before they will approve you for financing. This is where business credit scores can come in. Higher scores indicate to creditors that your business is more likely to pay bills on time, thereby improving the odds that you can obtain financing. Lenders can check your company’s business credit reports to get more detailed information about your business’s financial history, and business credit scores serve as shorthand evaluations. Here are three other ways your business credit scores may be used:
1. Determine your borrowing power.
Your business credit report and score can determine how much financing you are able to secure.
2. Determine your rates on business insurance.
Some insurance providers evaluate a business owner’s credit as well as the business’s credit to determine rates on commercial insurance.
3. Get more time to pay.
Vendors and suppliers may look at a business’s credit reports or scores to decide how long to give the business before payment is due for goods and services. Net-30” terms would mean your business has 30 days to pay, while net-60 terms gives you 60 days to pay. Securing longer terms on your terms with suppliers is a great way to improve cash flow.
What Are Business Vendors?
A business vendor (or supplier) sells goods or services to another business. If you run a clothing manufacturing company, for example, a vendor might supply you with cloth, labels, equipment, and other supplies you need to make your final product. If you own a construction business, you might purchase lumber, nails, tools, and equipment from a series of vendors as well. Rather than paying for what you need upfront, the vendor invoices you for those purchases, requiring you pay the balance by a specific number of days after the invoice date.
Vendors are often willing to extend short-term credit to small business owners who purchase services or supplies from them. This is called trade credit or vendor credit. It allows your business to get the supplies or services you need now but pay for them at a later date.
Not only can vendor accounts help your business’s cash flow by letting you buy now and pay later, they can also be an effective way for your company to establish business credit. This is true only if the vendor reports payments to business credit bureaus. In fact, even if your business is new, you might be able to qualify for vendor accounts. These accounts are often easier to qualify for than small business loans because limits are lower (at least to start) and suppliers want your business.
There’s another solid perk you may be able to enjoy when you open vendor accounts. Many vendors don’t require personal credit checks or personal guarantees. It’s often easier to qualify for this type of short term financing, plus reduce your personal liability while you’re trying to establish business credit history.
Nav Prime can give you up to two actively reporting tradelines to all major business credit bureaus. Whether you need help or not, building a strong profile is a key step to long-term business credit success.
What Happens When You Apply for a Vendor Account
Before you apply
Before you start applying for vendor accounts, it’s important to target your efforts so you apply for accounts for which you are likely to qualify. Some companies have more stringent requirements. Here, we will show you how to start with easy net-30 terms and work your way up to additional accounts:
We recommend you take these steps before you apply for vendor credit:
- Get an Employer Identification Number (EIN) from the IRS. Many businesses obtain an EIN for tax-reporting purposes. An EIN will not be the identifying number in the business credit system the way Social Security numbers are for personal credit; however, you may need an EIN for credit applications.
- Register your business with your state. We strongly recommend you form a legal entity such as an LLC, S corp or C corp. If you decide to continue operating as a sole proprietor (no legal entity) we recommend you at least register your business name as a fictitious name (also known as a “DBA”) with your state. DBA is different from shelf corporations.
- Get a D-U-N-S number if your business doesn’t already have one. The DUNS number is theidentifying number in the Dun & Bradstreet business credit database. Not sure if your business has one? Look up your business credit for free here or on your Nav profile.
- List your business phone number with directory assistance. Here’s how.
When you apply
- Use your business name and information on the application.
- Be consistent in the way you list your business name, address, phone number, etc.
- Avoid using personal information such as your Social Security number whenever possible.
- Make a note of your account number and the date you opened the account. It may take 60 days for a new account to appear on your business credit reports.
You may have to start with a low credit limit initially. As you establish a track record of on-time payments you can ask for a higher credit limit. You may eventually be eligible for longer net terms (such as net-45 or net-60.) Remember, these companies want to do business with customers who make purchases and pay on time.
What Net 30/ 60/ 90 Account Payment Terms Mean
Vendors extend different types of trade credit terms to their customers. The most common types of trade credit are as follows:
Net-30 Accounts
Net-60 Accounts
Net-90 Accounts
The net payment terms (sometimes referred to in the industry as “net D payment terms”) refer to how quickly the customer has to pay a vendor’s invoice in full for the supplies or services purchased.
Net-60 vendor accounts specifically are a type of trade credit that requires you to pay back the invoice amount 60 days from the invoice date. (Terms may be based on business days beyond that invoice date, rather than calendar days, so be sure to check.) Note that the invoice date and the due date are two separate dates.
You may not even have to pay interest if you use vendor credit. But you may forgo a cash discount that is available for an early payment, so be sure to review the invoice terms carefully. You’ll often apply by contacting someone in credit sales. Your sales rep may also be able to help you initiate the application.
How Trade Credit Works
Trade accounts (vendor or supplier credit), are accounts offered by companies that sell to businesses of all sizes. The vendor or supplier essentially becomes the lender by allowing customers to “buy now” and “pay later.”
Net-30 terms means full payment is due 30 days after the invoice date. Net-60 gives you 60 days to pay, etc. Always pay on time — early if possible — to establish a good payment history. Business credit reports may report payments as little as one day late, and with the D&B Paydex score, you’ll earn the highest score by paying early.
Not as common as net-30 terms, some vendors will offer net-60 or even net-90 terms.
Trade credit is used in a wide variety of industries including:
- Construction
- Manufacturing
- Restaurants
- Medical offices
- Most B2B companies
Even freelancers who provide services are essentially offering net-30 terms when they perform work for a client and get paid later. It’s the most popular form of small business financing.
Are Net 30 Accounts and Tradelines the Same Thing?
Yes and no. While they are often similar, they are not always the same.
“Tradelines” refers to accounts that appear on credit reports. Not all suppliers and companies that offer net-30 accounts report to business credit. That means you can have a net-30 account that does not appear on your credit reports as a tradeline.
Similarly, not all tradelines are net-30 accounts. They may be, but they can also be net-10, net-15, net-60 etc. And some tradelines are business credit cards or business charge cards, or small business loans or financing that report to business credit.
Why Trade Credit Matters
There are a number of advantages to establishing net-30 vendor accounts. They include:
- Improve cash flow: Paying for items you use in your business can improve cash flow. Some vendors will start customers off at net-10 or net-30 terms, but a number of them will extend longer terms to good customers with on-time payment histories.
- Separate business and personal credit: By securing payment terms with your vendors, you can separate your business and personal credit, and avoid using personal credit cards to purchase supplies for your business.
- Build business credit: Vendor accounts that report to business credit reporting agencies will help your business build business credit, which in turn makes it easier to get other types of business financing. The D&B PAYDEX Score, for example, is calculated by evaluating payment history with vendors. Learn more about how to report to the business credit bureaus.
- No personal credit check: Some suppliers and vendors (but not all) will not check the owner’s personal credit check. That means business owners with “bad credit,” may be able to begin to establish vendor credit while they continue to work on their personal credit.
Vendor Accounts Without Personal Guarantees
Some business vendors and lenders may request or require a personal guarantee (PG). With a PG, you agree that if your business doesn’t repay the debt, the lender can try to collect from you personally. While it’s best to avoid PG’s when possible, they may be required in some cases, especially when your business is young and hasn’t established strong revenues and/or business credit.
Tip: Read the application and terms and conditions carefully to determine if a PG is required. If the vendor asks for personal financial information such as a Social Security number, it may check your personal credit and a personal guarantee may be required. Clarify that with the lender if necessary.
Business Credit Cards: Another Easy Way to Build Business Credit
A business credit card can be used in a way similar to vendor credit: you can purchase items you need for your business and pay for them later. Most business credit cards offer a grace period, which can give you days or weeks to pay before incurring interest, depending on the timing of your purchase. Some business credit cards offer low-rate purchases and/or balance transfers, making them attractive when your business needs to borrow for longer periods of time.
A business credit card may help build business credit. Most business credit cards report to at least one of the business credit bureaus and most report to multiple bureaus. Paying at least the minimum payment on time on your business credit card on time may help you build business credit.
When you apply for small business credit cards, card issuers will check personal credit and a personal guarantee will be required. Generally, a good personal credit score will be required. It’s not until you move into “corporate credit cards” available to larger businesses with significant revenues that you can move away from these requirements. (An exception may be some commercial fleet cards or store cards that don’t check personal credit.)
While those may seem like drawbacks, they also offer advantages: as long as you have decent personal credit scores (usually in the mid-600s or higher) and sufficient income from all sources (not just business revenues), you should be able to qualify. These cards are often available to startups and businesses with little revenue.
The bottom line: A business credit card can complement net-30 accounts and offer similar advantages, including improved cash flow and the ability to build business credit.
What Are Net-30 Accounts?
Net-30 accounts are credit accounts from suppliers that extend you 30 days to pay the bill in full after you have purchased products. Net-30 accounts allow you to buy now and pay later and is commonly known as vendor credit, supplier credit, and trade credit. Vendors that report those payments to commercial credit agencies help your company establish strong business credit scores.
This is an important type of financing for business owners. The Consumer Financial Protection Bureau estimates that in 2019, small
businesses with under $1 million in annual revenue used more than $50 billion in trade credit.
These vendors generally don’t check the business owner’s personal credit reports, but they may. Personal credit checks for these types of accounts will generally result in “soft inquiries” that don’t affect personal credit scores, but there’s no guarantee.
Some of these vendors may require the buyer to make initial purchases before they extend net-30 terms. This is especially true for new businesses that have not yet established good business credit profiles.
While interest is not typically charged if you pay on time, you may forgo a cash discount.
1. Creative Analytics Net-30
Products offered: Creative Analytics is a full-service digital marketing and management strategy consulting agency that offers three different types of business accounts to choose from to build credit:
- An annual purchasing charge account ($79 annual fee). Purchase office products such as small electronics, desk and office decor/accessories, fitness items, beauty professional tools, kitchen items, etc. as well as limited digital marketing services on monthly installment plans (e.g. websites and social media). Reports tradelines between $1,000 and $10,000.
- A monthly “business credit on autopilot” membership (no annual fee or additional purchases required for reporting) to their Founders Circle community, where customers choose between a digital library plan or access to the full mastermind network ($49 – $149 per month). Reports tradelines between $1,000 and $12,000.
- Pay by Invoice account with Net-30 terms (no annual fee) for purchase of full suite of marketing or strategy services, such as WordPress web development, logo design, social media management and advertising, Google PPC, email marketing, SEO, management strategy, and more.
Worth noting: To qualify for a Net 30 account your business must:
- Operate in the United States
- Have a Tax ID number (EIN) and D-U-N-S number
- Be established for at least 30 days
- Not have any derogatory business reporting or delinquencies
- Have an authorized officer of the organization submit the application
Open a Creative Analytics account now.
2. Business T-Shirt Club Net-30
Products offered: Wholesale blank apparel including but not limited to t-shirts, sweatshirts, hats, outerwear, sportswear, corporate apparel, masks and much more.
Worth noting: Business T-Shirt Club is a membership based print & embroidery company offering access to premium apparel brands at wholesale rates, high quality custom print and embroidery services, print on demand fulfillment services, corporate partner discount programs and more. The annual membership fee is $69.99.
Open a Business T-Shirt Club account now.
3. Coast to Coast Office Supply Net-30
Products offered: Office products and digital downloads (software and eBooks).
Worth noting: No membership fees. To use Net-30 terms, during checkout make sure to click on the button that says: Bill My Net 30 Terms Account. A digital invoice will be sent to your registered email address.
Open a Coast to Coast Office Supply account now.
4. Summa Office Supplies Net-30
Products offered: office supplies such as paper, folders, envelopes, labels, etc.
Worth noting: Summa Office Supplies is eager to work with small businesses, and their stated goal is to provide the “human touch.” They offer credit for both new and well-established businesses and will provide written trade credit references upon request. As you establish a positive payment history, you can request larger credit lines.
Open a Summa Office Supplies account now. Use code SOSNAV at checkout.
5. NAMYNOT Net-30
Products offered: digital marketing services including include SEO, content writing, social media management & marketing, inbound lead generation, PPC, video production, e-commerce, plus WordPress design & development.
Worth noting: Customers may get up to $10,000 in buy now, pay later credit and get a decision within two days.
Get a NAMYNOT net-30 account here.
6. Office Garner Net-30
Products offered: Apparel, offices supplies, electronics, website design, business cards and more.
Worth noting: To qualify for net-30 terms, your business must have a clean business credit history, be in business for at least 30 days, and be based in the US. There is a one-time $69 processing fee.
Open an Office Garner account here.
7. The CEO Creative Net-30
Products offered: Office supplies, custom website design and branding services, business accessories, electronics and custom apparel.
Worth noting: To qualify for net-30 terms, your business must have a clean business history with no late payments listed on business credit for the past 6 months. It must be a U.S. based business, in business at least 30 days, with an EIN and active corporate filing with the state. There is a $49 annual fee upon approval.
Open an account with The CEO Creative here.
8. Ohana Office Products Net-30
Products offered: A variety of office products.
Open an Ohana Office Products account now.
9. Wise Business Plans Net-30
Products offered: Wise Business Plan® specializes in creating professionally written business plans, pitch decks and Powerpoint presentations for small business owners. Plans cover a variety of purposes, including franchises, non-profits, as well as investor grade and bank compliant plans. Each business plan is custom written by writers with MBAs, researchers, and financial modelers, and are professionally designed.
Worth noting: Wise Business Plan purchases are paid for with 50% due up front and 50% due before releasing the draft. Those purchases are reported to business credit bureaus.
Open a Wise Business Plans account now.
10. Quill Net-30
Update April 11, 2023: Quill may not be currently reporting to business credit. Check before you apply.
Products offered: Office supplies, including a wide variety of supplies in the following categories: cleaning, coffee/snacks, safety, laboratory, healthcare, health and wellness and more.
Worth noting: Some business owners with no business credit history have reported they were required to purchase at least $100 of products per month over a 90 day period and pay those off before qualifying for a net-30 account.
Open a Quill account now.
11. Grainger Net-30
Products offered: Over 1.6 million industrial and safety products offered
Worth noting: While a Grainger account is generally easy to get, some business owners have reported that they were unable to qualify immediately because they had no business credit references, or because their business was just recently incorporated. Some found they were able to talk with a representative to establish credit terms, while others had to start with other accounts.
Open a Grainger account now.
12. Uline Net-30
Products offered: Packaging, janitorial, food service, safety warehouse supplies and more
Worth noting: Most business owners report success opening a credit account with Uline. If your business is young and you have trouble qualifying, you can contact their credit department. You may need to make five or more purchases before you can access net-30 billing.
Open a Uline account now.
13. Newegg Business Net-30
Products offered: NeweggBusiness offers a wide variety of technology products and solutions.
Worth noting: You must have a Newegg Business account before applying for net-30 terms.
Apply for a NeweggBusiness net-30 account here.
14. Growegy
Products offered: project management calendar, marketing AI software, marketing coaching, and agency services
Worth noting: Growegy offers two plans: monthly and annual. The annual plan ($600 total) can be paid in 3 installments and offers access enhanced AI and more account management time and marketing support. The monthly plan is $55 per month.
You’ll need a legal company name, business address, principal name, business email address, business phone number. After submission Growegy will request and verify the EIN.
Open a Growegy net-30 account here.
15. JJ Gold Net-30
Products offered: Corporate gifts, personal care and cosmetics.
Worth noting: Your business must be in business at least 30 days with an EIN, utility bill or bank statement and driver’s license to qualify.
Open a JJ Gold account now.
16. Staples Net-30
Products offered: Staples offers a wide variety of office products and serves more than 2 million small business customers.
Worth noting: The Staples Business Advantage Net-30 account is appropriate for businesses with ten or more employees and that have been in business for at least a year. Businesses with fewer employees may want to apply for the Staples Commercial More Account which also offers net-30 terms and gives 5% back on purchases online and in store.
Open a Staples account here.
17. Supplyworks Net-30
Products offered: Supplyworks is now the wholesale distribution division of The Home Depot® offering pro-grade products—everything from cleaning chemicals, paper products and PPE to plumbing and lighting products.
Worth noting: The minimum order is $150. Orders less than $150 are subject to a $9.95 handling fee. Minimum order on drop ship orders is $50. Invoices not paid within terms are subject to monthly service charges of 1-1/2% per month (18% annual percentage rate).
Open a Supplyworks account here.
18. Fidextech®
Products offered: Digital marketing agency specializing in web design, app design, and digital marketing services such as PPC ads, SEO, and logo design and branding for both new and growing businesses. Fidextech also offers web hosting packages and domain names. It reports monthly to one of the major business credit reporting agencies.
Worth noting: No monthly or annual membership fee. To qualify, must be a registered verifiable business at least 90 days old with an EIN. There is no personal credit check but there is a business credit check.
Get started with Fidextech here.
19. HD Supply Net-30
Products offered: HD Supply offers a wide variety of products for the business professionals in maintenance, repair, and operations (MRO).
Worth noting: You can also get a ProPurchase® card, which works at The Home Depot® retail stores nationwide, and those will be invoiced to your HD Supply account. For net 30 accounts, a minimum charge of $2 or 1.5% per month, 18% per year, is charged on past due invoices.
Open a HD Supply net 30 account here.
20. Crown Office Supplies
Products offered: Office Supplies, school supplies, home decor, apparel, drinkware, electronics and mobile accessories
Worth noting: No personal credit check. Must be in business at least 90 days with no negative information or late payments. Active EIN required, and optional DUNS number. Annual fee of $99. Reports to multiple credit bureaus.
Open a Crown Office Supplies account here.
21. Linear Supplies
Products offered: Office and home supplies, electronics, and kitchen accessories.
Worth noting: There is a one-time membership fee of $59. Business must in in business for at least 30 days. There is a soft personal credit check.
Open a Linear Supplies account here.
22. Wayfair Professional Net-60
Products offered: Wayfair offers a very wide variety of products including office and storage supplies, furniture, lighting, tech accessories and much more.
Worth noting: Wayfair Professional offers two types of accounts. The Wayfair Professional Flex Account is a net 60 account, at checkout. The Wayfair Professional Credit Card offers 2% cash back. The website states that both accounts help build business credit, though the specific bureau is not mentioned. They are offered through Capital One. Unlike most of the accounts on this list, this account may require a personal guarantee. An EIN is required, and terms and conditions state a business entity is required.
Both financing options are eligible to use in the United States across all Wayfair sites: wayfairprofessional.com, wayfair.com, jossandmain.com, allmodern.com, birchlane.com, and perigold.com.
While orders can be delivered globally, financing accounts must be tied to a United States physical billing address. If you don’t have a United States physical billing address, call Wayfair at 844-251-0720 to learn more about your financing options.
Sign up for a free Wayfair Pro account to access credit applications.
23. Office Depot OfficeMax Net-30
Products offered: Office Depot offers a wide range of office supplies, printing, furniture and more.
Worth noting: The Office Depot OfficeMax Business Account requires payment in full each month. On the application it suggests agreeing to a personal guarantee to increase the likelihood of approval if your business meets any of the following criteria: a sole proprietorship, a partnership, unincorporated; or a corporation with an annual revenue of less than $5,000,000, less than 10 employees, or incorporated less than 3 years. Some applicants have been denied with less than three years business credit history, so you may want to make sure business credit is well established before applying for this account.
Open an Office Depot OfficeMax account here.
24. Amazon Net-30
Products offered: Amazon offers a large selection of products for businesses.
Worth noting: Amazon’s Pay by Invoice program offers net 30 terms, which can be extended with a Business Prime Membership to net 45 (small and medium businesses) or even net 60 terms (enterprise). However, this program is by invitation only and does not report to business credit.
As an alternative, the Amazon Business Credit Card allows you to choose 3% back or 60-day terms, while the Amazon Business Prime American Express card allows you to choose 5% back or 90-day terms. It does report to multiple business credit bureaus.
25. BONUS: Nav Prime
Nav Prime isn’t technically a net-30 vendor because you pay as you go, but paying your bill every 30 days can help you build business credit history by establishing a new tradeline with multiple business credit bureaus. You also get a second tradeline with your regular use of the built-in Nav Prime Card*. Reporting is never negative.
Get Nav Prime here.
Pros and Cons of Net-60 Payment Terms
As with any type of business financing there are pros and cons.
Pros
- Can be fairly easy to qualify
- Often no personal credit check
- May build business credit
- Improves cash flow
Cons
- Not all vendors offer terms
- Short repayment terms
- May forgo discount by paying later
- Not all build business credit
List of Net-60 Vendors
Typically, it’s easier to find net-30 terms from companies that are willing to extend trade credit to your business. Net-60 terms are not as commonly offered by vendors, especially to newer businesses or newer customers. Sometimes longer terms go to larger businesses, but not always.
The good news is that net-30 accounts can work very well when you’re getting started. Once you establish an on-time payment history, ask your supplier for longer payment terms.
In addition, here are options to consider:
- Faire offers eligible businesses 60-day net terms.
- Abound offers net-60 payment terms to qualified retailers. You’ll need a payment method linked to your account, and it will be automatically charged when your payment is due.
- Creoate offers up to 60 days to pay to qualified retailers.
- Mirta Wholesale offers 60 days to pay with a helpful online tool to help you determine if your business qualifies.
- ApparelCandy offers payment terms of up to six months through Behalf (application required and interest will be charged).
While these offer longer payment terms they may not build business credit. Check with the vendor to find out if it reports if that is important to you.
What Are 2% Net-60 Terms?
With vendor terms there is a discount if you pay quickly. An account that offers 2/15 net 60 terms provides a 2% discount if the invoice is paid in full within 15 days. If you do not, the discount will not be given and the balance is due in 60 days from the invoice date.
What’s Better: Net 30 or Net 60?
Longer payment terms gives the entrepreneur longer to pay the amount due, and in that regard it can be helpful for cash flow. They allow the business owner to get what they need to produce products or services without having to pay for them upfront. On the other hand, the longer the terms, it’s also possible for a business to incur more debt with longer terms.
How to Choose the Right Vendor Account
When choosing a vendor account, it’s a good idea to pause and ask yourself what goals you’re trying to achieve. By asking yourself the following questions, you can narrow down the right vendor accounts for your company.
- Are you trying to improve business cash flow? A more flexible payment schedule can help you manage cash flow. A net 60 account will probably be more attractive to you than a net 30 account which requires a faster turnaround for payment.
- Do you want to build credit for your business? Consider vendor accounts that report to a commercial credit reporting agency. Vendor accounts with net 30 payment terms are more common in this space.
- Would you like to establish good business credit scores with all three of the major bureaus (Experian, Equifax, and Dun & Bradstreet)? You may need to open multiple vendor accounts that report to different business credit bureaus to accomplish this goal (although your Nav Prime payments and Nav Prime Card* payments are automatically sent to the major business credit bureaus).
- Do you need easy-approval vendor accounts because you’ve never established credit in your company’s name before? Finding vendors with less strict approval criteria should be a priority. New clients may need to establish a purchase history before they can qualify for payment terms.
Once you identify the features that matter most to you (e.g. reports to one or more credit bureaus, easy approval, longer net terms etc.), you’ll be better prepared to begin your search.
Make the Most of Vendor Accounts
When you get vendor accounts, it’s important to manage them well. Paying invoices on time will make it more likely that the vendor will raise your credit limit and/or be more open to extending longer terms. Late payments, on the other hand, may trigger late fees and cause the vendor to lower your credit limit. In addition, those late payments may hurt your business credit. (Payments that are just one day late can appear on your business credit reports.)
Once you have established a positive payment history don’t be afraid to ask your existing suppliers if they’re willing to offer better invoice payment terms which will allow you to pay for goods or services at a later date. As a buyer, you may have more leverage than you realize. If you already have existing vendor accounts that are set up with net-30 payment terms, you can also ask suppliers if they’re willing to increase those to net-45 or net-60 terms. You might be able to secure longer payment terms and transform your net-30 accounts into net-60 accounts simply by asking.
Alternative to Net-60 Terms
Not all vendors allow you to pay later. In addition, this is very short-term financing and there may be times when you need the ability to pay for purchases over a longer period of time. In that case, you may want to consider other forms of business financing such as:
- Business loans or lines of credit: With these types of financing you may be able to repay debt over a period of months or years. Either can be helpful for larger projects with a longer payoff. A line of credit, in particular, can be a helpful alternative to vendor terms. However, most lenders require documented revenues, good credit and at least a year in business to qualify.
- Business credit cards: Business owners often think of credit cards as a convenient payment option while overlooking the fact that they also offer affordable short term credit. Credit cards with grace periods allow you to “float” purchases without paying interest. They may allow you to take advantage of an early payment discount with a vendor and then have up to 60 days to pay for the purchase without incurring interest.
How does that work? Most credit cards offer a grace period, so if you pay the statement balance in full you’ll avoid interest. If you time a major purchase to occur right after the statement closing date then it will appear on the following month’s bill – giving you up to 60 days to pay for that purchase without paying interest.
Of course if you don’t pay your balance in full, you’ll be charged interest at the credit card’s purchase interest rate. And that interest may outweigh the discount you received, so be sure to set up a system to pay on time.
What Are Net-90 Vendor Accounts?
Vendor credit, also called trade credit, is a type of short-term credit your business may receive from suppliers or service providers. With vendor accounts, your business can buy now and pay later for the goods and services it needs to operate.
Many types of business-to-business (B2B) companies may be willing to offer vendor accounts. For example, if your business relies on advertising services, office supplies, technical support, or raw materials used to manufacture merchandise, you might be able to find a vendor that’s willing to offer you trade credit for your purchases.
A net 90 vendor account refers to how long a supplier or vendor gives you to make your payment. When a vendor approves you for a net 90 account, it means you don’t have to pay for the goods or services your company receives until 90 days from your invoice (though you might be offered an early payment discount if you make your invoice payment sooner).
