Updated: Jan 26
Oftentimes, when asked what types of credit they already have, business owners will stammer, or say they aren't sure, or will say they don’t have any credit, or that they have some trade lines or a few basic credit cards.
In reality, they may be further along in the credit-building process than they even know. Few realize that just about everything their business pays for, in one way or another, is going to be considered a debt — whether it is paid for ahead of time, at the point of sale, on net terms, or over a period of days, weeks, months, or years.
Below is a basic breakdown to help you better understand the different types of credit:
VENDOR credit is defined as accounts with suppliers who provide products or services to any industry but not to any specific industry, such as office supplies, signs, computers, fuel, paper, software, forms, tools, etc. These are the things that most business owners will need in day-to-day operations.