Retailers, and wholesalers, need good credit if they would like to obtain financing at a reasonable rate.

A strong business credit score can also enable retailers and wholesalers in obtaining merchandise on credit, which means that they can receive products from their suppliers, and pay for those products at a later, predetermined time.

Basically, the credit rating score is a mathematical rating of a business’ credit reliability, and also, the method through which financial institutions perceive your business acumen. A reduced credit rating implies a higher risk for the financial institution, while a great credit report score assures them that your business will certainly be a good borrower, who is most likely to pay back the money and the rate of interest, and also a gage for your track record in paying suppliers and vendors on time, or paying them at all.

You might ask yourselves how the bank learns more about this score, to begin with. Every person's business’ credit score is kept in a record, and every time you request a financing, get a bank card, open up a new checking account, rent commercial space, purchase a vehicle, banks are the ones that find your credit rating report, later used to determine your credit score. Credit history reporting agencies are the ones that give every bank your credit score report and history. The monetary life of every retailer and wholesaler resembles an open library, which every bank and financial institution remains in title to open, as well as hence act as a gatekeeper to your business’ ability to enter the marketplace through credit. Because of the impact of a positive score, there is an entire industry, of which you need to be very wary, that is aimed at helping improve the score of individuals and businesses.

To obtain a lower rate of interest you ought to initially focus on obtaining credit, such as opening credit cards, using a line of credit, and opening accounts with your vendors. The terms that you initially will receive might be burdensome, but your initial focus should be on building up your credit score. As your credit score increases, you should be able to obtain better terms going forward.

Fortunately for new store owners, there are many suppliers who will extend credit without checking your score, but when it comes to financial institutions, the score is crucial.

For instance, there are many suppliers in the Panama Free Trade Zone who will take a chance on supplying merchandise without prepayment, as well as local distributors in New York, the city where my closeout business is located.

Be careful when extending credit, since once a retailer declares bankruptcy, as with what has happened recently with JC Penney and Sears, it can be very difficult to recover your receivables from the court appointed administrator who oversees the bankruptcy process.

I can think of a few major local discount retailers who went bankrupt, such as National Wholesale Liquidators, The Wiz, Century 21, and Ascena Retail. Once a retailer goes bankrupt, vendors might be fortunate to recover 5 to 20 percent of the amounts that they were owed, and it can take years for these retailers to recover even those amounts.

Below are some of the main credit agencies for businesses. It can be worthwhile to request a report on your business, this way you can monitor your score, and correct any mistakes on your report.

• Dun & Bradstreet.

• Experian Business.

• Equifax Small Business.

Below are some credit cards that can be useful for retailers and wholesalers.

Ink Business Unlimited Credit Card

American Express Business Gold Card

The Business Platinum Card from American Express

American Express Blue Business Cash Card

Costco Anywhere Visa Business Card by Citi

The Blue Business Plus Credit Card from American Express

If your business’ credit score is not sufficient to obtain a credit card, you can start out by using a debit card connected to your business checking account, available from most, if not all, NY banks such as Northfield Bank, Citibank, Richmond County Savings Bank, Santander, Chase, Hudson Valley Bank, Apple Bank, and M & T Bank.

You can also use prepaid cards such as those issued by:

Pex

Mastercard

AbbyBank 

Chime 

OmniCard.com

Dash

Bento For Business

Chase

Below are links that provide resources for businesses who are seeking to improve, or obtain, better credit, financing, and grants:

https://www.nerdwallet.com/article/small-business/small-business-grants

https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources

https://www.experian.com/small-business/build-business-credit