Definition 1:
Alternative Term for Trade Credit or Corporate Credit.
Definition 2:
Bank Loans to Firms As Distinct From Loans to Consumers.
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Definition:
Open-account, short-term (usually 30 to 90 days) deferred payment terms offered by a seller to a buyer as a standard trade practice or to encourage sales. In some trades such as jewelry business, the credit may extend to 180
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Business Credit is developed over time through planning and implementation of smart tactics. Today, establishing and managing your business credit has increased in importance.
There are very finite steps that need to be taken when you are establishing your business credit profile.
Step 1. Separate personal from business credit.
(Learn more…)
To grow business credit it is absolutely imperative for you to clearly separate your business credit from your personal credit. The rules and regulations are infinitively different from the rules and regulations of personal credit.
There are no laws to regulate business credit, which means if you are personally guaranteeing any business credit loans, you are personally responsible for payment on these loans.
When you use more than 50% of the limit on any personal account, your personal credit ratings decline. However, you can max out business accounts with no negative repercussions to your business credit ratings.
Normal business credit usage will cause your personal credit scores to drop dramatically if they are combined.
Step 2. Pay attention to the credit terms of each business account.
(Learn more…)
When terms are Net 10 or Net 30 or Net 60, it means your balance is due in full by 10, 30 or 60 days after the date on your invoice. Pay by that date to receive a *Paydex Score of 80 from Dunn and Bradstreet (D&B). Unlike personal credit, you can earn bonus points for paying business accounts early. Keep in mind scores are lowered each day a payment is late.
D&B's unique dollar-weighted numerical indicator of how a firm paid its bills over the past year, based on trade experiences reported to D&B by various vendors. The D&B PAYDEX Score ranges from 1 to 100, with higher scores indicating better payment performance.
Use this key to help you interpret the D&B PAYDEX Score.
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| PAYDEX |
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Payment |
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| 100 |
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Anticipate |
| 90 |
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Discount |
| 80 |
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Prompt |
| 70 |
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15 Days Beyond Terms |
| 60 |
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22 Days Beyond Terms |
| 50 |
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30 Days Beyond Terms |
| 40 |
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60 Days Beyond Terms |
| 30 |
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90 Days Beyond Terms |
| 20 |
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120 Days Beyond Terms |
| UN |
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Unavailable |
Step 3. Establish lines of business or trade credit.
(Learn more…)
To qualify for business credit, you must complete several steps in the correct order.
Zapper Credit Solutions has perfected this process over the course of the past 8 years. Helping more than 30,000 clients set the ground work for success.
The best time to establish credit is when you don't need it. If you have a financially stable business with no credit lines available to you, figure out what you need to do to acquire a line. Think of a credit line as a safety net for your business. You hope you'll never need to use it. However, if the current economic forecasts continue to down slope and we remain in this very unpleasant financial fiasco through 2010, you very well may be very happy to draw on a line of credit to get your business through some rocky times.
Business credit is the main way companies evaluate whether or not they want to do business with you – and on what terms.
Building business credit is much more straightforward than building personal credit. However, if you do not follow the steps in order you run the risk of red –flagging your business for life, leaving you with no means to grow your business without compromising your personal credit scores by using personal resources to support your business.
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Zapper Credit Solutions
777 N. Rainbow Ave. Ste#250
Las Vegas, NV 89107
Tel: 1-866-854-5513 |
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