When you have a vendor credit line, you will be able to acquire a great many products and services essential to your business, while deferring payments until some other time. Another advantage of having a vendor credit line is that it helps to establish a business credit file for your company, and this can be used in the future by other lenders who wish to inquire about your reliability and trustworthiness. When you have a positive payment history with a number of different vendors, that can be an excellent recommendation about your overall creditworthiness.
Make sure that when you do purchase products and services from vendors on credit, that your good repayment habits are reported by those vendors. Not all vendors do bother reporting to the business credit bureaus, so make a point of requesting vendors you do business with to report your positive history. If your vendors and suppliers don’t bother to report your prompt payments, you’ll never get the proper credit for them with the bureaus.
Another aspect of supplier reporting is that you should persuade your suppliers to report all payment activity every month so that you can really take advantage of your consistently prompt payments. If a supplier only reports sporadically, that’s all the information the credit bureaus will have on you, so no one will really know whether or not you are a creditworthy business.
Have a conversation with your vendors and suppliers to make sure that when they do report prompt payments you’ve made, they also include information about your credit limit. This is another important factor to credit bureaus because they will know how much of your credit is currently being used. If all suppliers reported only what you owe to them, there would be no way for a credit bureau to determine how much of your credit balance is available, and how much you have currently in use.
Interested in a Line of Business Credit?
Having a business line of credit can give you the kind of flexibility you’ve always wanted for your business. Contact us today at Eagle Bend Capital Financing to see if you qualify for a business line of credit with us.