A vendor line of credit refers to a situation where a company (the vendor) extends a credit line to your business with terms like “Net 15, 30, 60, or 90.” This means you can purchase their products or services up to a specified maximum amount and are given 15, 30, 60, or 90 days to settle the bill in full. For instance, if you are on Net 30 terms and you buy $300 worth of goods today, that $300 must be paid within the next 30 days. This arrangement allows you to acquire necessary products and services for your business and delay the payment for a specified period, thus assisting with cash flow management. Some vendors may grant your company Net 30 payment terms with minimal requirements, such as an EIN number and a listing in 411. The process typically involves applying for the account, utilizing the credit with purchases exceeding $50, and ensuring timely or early bill payment. It’s important to note that your payment history primarily influences business credit scores. These vendor accounts will report to business reporting agencies within 30-50 days or over up to three reporting cycles. Once reported, you will have established a business credit profile with a favorable credit score as long as your payments are punctual. At this stage, you will also have multiple trade lines. To advance and begin obtaining store credit, you must have at least five reporting accounts, which is the subsequent step in building business credit.