Securing funding for your business may be difficult if you are not already established in business. It takes time and a lot of activity to build creditworthiness. However, you can look into exploring vendors who extend net 30 accounts or unsecured business lines of credit.
Net 30 vendors offer credit lines for businesses to pay for their services or products. These products or services can help you operate your business but not every vender that offers net 30 extends this to all companies. There are some business qualifications and specific credit you need to meet.
Companies that are established have a credit limit to purchase supplies from a vendor. The vendors offer invoice terms between 15 and 90 days. Net 30 is a 30-day invoice term meaning that you need to pay within 30 days after you purchase the supplies. If you do not have a business credit history yet, you may need to use your personal credit history to qualify.
The most important factor is that the lender reports your activity to the business credit bureaus. In the future if you seek funding, you will have more opportunities that you will qualify for.
An unsecured business line of credit is great for short-term funding needs. It is unsecured because lenders do not require collateral to qualify. It works similarly to a credit card where the line of credit is available for the businesses to use repetitively.
Below are the differences between net 30 accounts and unsecured lines of credit:
Unsecured business lines of credit are more flexible with repayment and what you can purchase. Net 30 vendors focus more on getting what you need to keep your business running. A net 30 account will be great if you want to control your spending habits and only get things you need for your business. If you are seeking more options on how to use your business funds, an unsecured business line of credit will help you with that. You need to look at your overall business goals to figure out the best option for you.