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Business credit requirements to meet before applying for business loans

Business credit requirements to meet before applying for business loans

  • Obtain five (5) or more vendor accounts reporting to move to the retail credit tier, fleet credit tier, and cash credit tier.
  • Some lenders require five (5) vendor accounts; others require eight (8) or more vendor accounts.
  • If you do not have five (5) or more reported vendor accounts, do not apply for the retail credit tier.
  • It would take 30-90 days for those accounts to report to the business credit bureaus. Some of them report monthly, and others quarterly. How often do they report to the business credit bureaus? You may need to ask them. Look for vendors who report monthly for better results.
  • A total of 14 accounts or more payment experiences get you approval for cash credit with Visa and MasterCard lenders. Generally, you need one of those payment experiences to have a credit limit of $10000 or higher to get cash credit. Fund your business with high credit limits and cash credit.
  • Push for higher credit limits periodically.

A “payment experience” is an account reported to a business credit reporting agency. Obtaining an approval with a vendor that reports to Experian and Dun & Bradstreet counts for two payment experiences. If the credit account only reports to Dun & Bradstreet, that is considered only one payment experience. Consider it an advantage to obtain business credit accounts that report to multiple credit reporting agencies to expedite results.

In building business credit, many retailers have Time-In-Business (TIB) or revenue requirements.

Older companies fair better than new companies. These requirements should not put you off from applying if you’re starting with a new company. If you have the required number of reported vendor accounts, this can compensate for revenue. Request manual review for to seek an approval. The key to building business credit is reaching for a higher number of payment experiences.