According to the survey conducted by the NSBA Small Business Access to Capital Study in 2017, 20% of small business loans were denied due to business credit. And as per the statistics from America’s SBDC in 2021, 36% of small businesses were denied funding due to low credit scores.
If this trend continues, the number of businesses denied funding because of poor credit will increase. Furthermore, it will create a troubling scenario for most of the entrepreneurs, especially for the small business owners who are just getting started.
And that’s why the concept of Net 30 accounts was introduced.
But what exactly is a Net 30 business credit account? And how does it really help to improve your business credit?
Well, to know all these details, read this guide and understand how Net 30 can be a game-changer for your business success.
What is a Net 30 Account?
A Net 30 account is called a vendor tradeline, which allows businesses to buy the products or services now and pay the bill within 30 days. As compared to loans or credit cards (financial tradelines), the Net 30 accounts are easier for new businesses to get.
What is a Business Credit?
Business credit shows the lenders and vendors how trustworthy your company is when it comes to borrowing money or paying bills. If your business pays bills on time, it gets a good score. If it pays late, the score goes down.
A strong business credit score helps your company get:
- Loans from banks
- Better interest rates
- More trust from other businesses
How Net 30 Business Accounts Improve Your Business Credit?
1. Builds a Positive Payment History
Every time your business makes a payment on time (or early), it sends a clear message – “your business can be trusted to pay its debts.”
When a vendor reports this on-time payment to a business credit bureau, it becomes part of your business’s payment history – an important key factor in calculating your business credit score.
Over time, multiple on-time payments create a strong and reliable payment history. This is one of the most important elements that allows lenders and suppliers to decide whether to work with or lend to your business or not.
Example:
If your business has five Net 30 accounts and you’ve paid all of them on time for six months straight, your business credit profile will show a consistent track record of responsibility.
2. Shows the Lenders that You’re Responsible
Banks, lenders, and financing companies want to work with businesses they can trust. One of the first things they check is your business credit report.
When they see that your business clears its Net 30 accounts on time, they’re more likely to approve for:
- Business credit cards
- Equipment loans
- Working capital loans
- Business lines of credit
Basically, it proves that your business knows how to manage money and debt responsibly.
Why does it matter?
Strong payment behavior signals low risk to lenders. If they see you’re reliable, they’re more willing to lend money or extend better terms.
3. Helps to Get Better Credit in the Future
Initially, the Net 30 credit limit might be small. But as your payment history grows stronger, vendors often increase your credit limit and offer longer terms. Also, in that case, more vendors and suppliers will be open to working with you when they see that your business has:
- Good credit history
- Strong payment habits
- Positive trade references
Eventually, your business may even qualify for traditional financing, like business loans or commercial leases.
| Tip: The key is to start small, be consistent, and let your credit profile grow with your business. |
4. Improves the Vendor Relationships
Vendors care about working with trustworthy businesses. When you use Net 30 terms and pay your bills on time, you build credibility.
This credibility can lead to:
- Better pricing or discounts
- Access to exclusive products or deals
- Faster shipping or priority service
- Extended payment terms over time
In other words, good payment behaviour doesn’t just improve your credit score; it improves how vendors treat your business.
Example:
A vendor who trusts you may give you better payment terms, like Net 60 instead of Net 30, which allows even more time to manage cash flow. Or there is a chance that they might offer bulk discounts, which will save you money in the long run.
5. Stronger Business References
When you work with a vendor and always pay your bills on time, they start to trust your business. Over time, that vendor can become a helpful reference when you apply for business credit or a loan.
If a vendor tells a bank or another supplier that you always pay on time, it makes your business look more trustworthy.
This can lead to:
- Faster approval for loans and credit
- Better payment terms with new vendors
- More respect from banks and other companies
- A stronger business reputation
Final Thoughts
Using Net 30 accounts wisely isn’t just about getting extra time to pay. It’s a powerful tool to:
- Build business credit
- Strengthen financial trust
- Open doors to better funding options
- Build lasting relationships with suppliers
For small and growing businesses, starting with a few Net 30 accounts and staying consistent with payments is one of the smartest moves to improve long-term financial health.
So, if you’re just starting out, remember to start small, pay early, and keep track of all the details. Over time, those good habits can lead to big opportunities.
