Vendor credit or trade credit as it's sometimes called is the ability to buy equipment or supplies for your business, from vendors, using credit instead of cash. Business owners often say that they could grow their business faster if they just had more money to do so. Vendor credit allows business owners the opportunity to use cash where it's needed most instead of spending it on things which could be purchased on credit.
A very common example of where business owners can establish vendor credit would be nationwide stores like Sam's Club or Best Buy®. These stores allow business owners to get a line of credit which may be used to purchase essential items like office furniture, office supplies, computers, printers, etc. This enables business owners to avoid spending large amounts of startup capital on items which could be paid for slowly over an extended period time instead. Taking advantage of available vendor credit options allows business owners to get the essential items required to run a successful business and hold on to more that vital startup capital which can then be used for other purposes. Strategic planning regarding how startup capital is spent can be the difference between a business failing or thriving.
It's important for business owners to find out and understand exactly what they are agreeing to when committing to a vendor credit agreement. Some companies may expect to be paid back sooner than others. Take the time to understand vendor credit terms like Net 30 which you are likely to encounter often.
In order to establish vendor credit, a business owner will need to go through an application process in which their business will be reviewed to determine if and how much credit will be available. Our FREE corporate credit building system can help a business owner become more attractive to vendors, credit card companies, banks and other types of lenders or investors.