Business-to-Business Credit, Access Financing, B2B Financing

Business-to-business credit (B2B) is simply one business giving another business a line of credit for the specific products or services that the credit providing business produces or offers. Currently there are more than half a million businesses in the United States, and many more worldwide, that are extending B2B net 30 or net 60-day credit payment terms.

As much as 90% of all business funding is B2B and not Business to Bank.

It is a fact that as much as ninety percent of the business credit being provided in the United States is being done business-to-business and not bank-to-business. Business-to-business credit currently exceeds all business loans that are made by the SBA, banks, business credit cards, equipment leasing companies and other forms of business lending.

One major issue with business-to-business credit is that even though there are over half a million businesses extending credit to other businesses, there are less than ten thousand of those business credit line providers that report credit histories on those payments to the business credit reporting agencies.

To help your business build strong business credit scores using business to business credit, also called "Vendor Credit”, becomes a very important tool. Knowing which businesses will not only extend credit to your business but also knowing which ones will report your credit payment history to the business credit reporting agencies which are; Experian Business, Equifax Business, CreditSafe and Dun & Bradstreet is very important. Obtaining at least ten to fifteen vendor lines of credit with companies that will report your credit payment history is a key factor in building strong business credit scores. Building strong business scores will also have an impact on your business FICO SBSS which is critical to obtaining bank and SBA larger loans.

On the other hand, there are many times when a business wants “Off Book Financing”. This means having available lines of credit that do not report to the business credit reporting agencies. Off Book Financing can be advantageous when needing to have the available credit lines but not wanting those credit lines or their usage to appear to others such as your competitors.

Vendor lines of credit are a very good way to conserve working capital

This allows businesses to be able to put off having to come out of pocket now for something that they may get paid on later that is part of what they used the product or service for. An excellent example is if you are building or servicing something yourself. You can use vendor credit to get the parts, materials or supplies needed to complete the build, service or project, get paid by your customer or client and then pay your vendor credit lines thirty, sixty or even ninety days down the road.

There are many businesses that operate successfully on only business-to-business vendor credit lines without ever needing or wanting to take on more risky and more expensive working capital debt. Instead, they turn the products and services which they receive on vendor credit payment terms and then turn those products and services into cash by getting paid from their customers or clients before needing to make payments on their vendor lines of credit. In that way they can repeat the process over and over again without the need to take on either short term more expensive debt or long debt higher risk over time debt.

Many of the available business-to-business vendor lines of credit are effectively zero percent (0%) interest as the business-to-business credit providers do not charge interest so long as the debt is repaid as agreed. The practice of invoice factoring can also be used to make sure your business gets paid immediately on all your open invoices so that your business is guaranteed to be able to make your vendor credit line payments on time and as agreed.