{"id":6014,"date":"2019-05-06T16:41:34","date_gmt":"2019-05-06T13:41:34","guid":{"rendered":"https:\/\/www.lending-express.com\/blog\/?p=6014"},"modified":"2019-05-06T16:41:36","modified_gmt":"2019-05-06T13:41:36","slug":"how-to-get-more-trade-credit","status":"publish","type":"post","link":"https:\/\/www.become.co\/blog\/how-to-get-more-trade-credit\/","title":{"rendered":"How to Get More Trade Credit from Your Suppliers"},"content":{"rendered":"\n

If you\u2019re a contractor or landscaper, your success often depends on your ability to get financing so you can purchase the supplies and equipment you need. Business loans and lines of credit are the financing sources most business owners think of first. However, they can be time-consuming to apply for, and are often an expensive source of financing. Why not look for funds in your existing business relationships? Getting more trade credit from your suppliers is one way to do so.<\/p>\n\n

Trade credit basics<\/h2>\n\n

Trade credit<\/i>, sometimes called net terms <\/i>or vendor credit<\/i>, is the practice of buying products or services to be paid for at a date in the future. Instead of paying right away, your business gets the goods or services it needs, and the supplier sends you an invoice that must typically be paid in 30, 60 or 90 days. (\u201cNet 30\u201d is the most common, although terms can be as short as 10 days or as long as 120 days in some cases).<\/p>\n\n

Trade credit is an ideal financing method for contractors and landscape businesses. As seasonal businesses whose income fluctuates, these companies can use trade credit to manage cash flow better by delaying payments. Contractors and landscapers can also use trade credit to buy the materials they need for projects, then pay for them later (such as after the project is completed and the client has paid).<\/p>\n\n

Getting trade credit<\/a> is generally easy to do. Suppliers will typically ask you to fill out a credit application and provide trade references (that is, other companies you\u2019ve received trade credit from). Once they check your business credit report and your references, they\u2019ll set trade credit terms.<\/p>\n\n

How to get more trade credit<\/h2>\n\n

When your suppliers first extend trade credit to your business, your limits may be lower than you\u2019d like. How can you get more trade credit from your suppliers? Here are some ideas.<\/p>\n\n

1. Approach multiple suppliers<\/h3>\n

If Supplier A doesn\u2019t want to up your limit, all is not lost. You can get more trade credit by doing business with multiple suppliers. For example, suppose Supplier A provides window frames, doors, drywall and flooring for your business but only gives you $50,000 trade credit limit\u2014which isn\u2019t enough. Use Supplier A to provide window frames and look for Suppliers B, C, and D to provide doors, drywall, and flooring. If each gives you $50,000 in trade credit, you\u2019ve just expanded your limit to $200,000 altogether.<\/p>\n\n

2. Adjust your terms<\/h3>\n

Even if you can\u2019t get a higher trade credit limit, you may be able to get better terms, such as extending from net 30 to net 60. Many suppliers offer discounts for early payment; taking advantage of these can save you substantial money. You can also talk to your supplier about spreading out your payments\u2014such as paying more during busy months when you have a lot of income and less during your slow season.<\/p>\n\n

3. Build your credit profile<\/h3>\n

The best way to get more trade credit is to build a strong credit profile and reputation with suppliers. Here\u2019s how:<\/p>\n\n