Features
Part of Net 30 accounts: the payment term, the start date, and reporting
Net-30 accounts and five other ways to move a payment date
Net-30 accounts set beside five other ways to move a payment date: who provides the time, how each recovers its cost, and what each needs from you first.
Net-30 is one answer to a narrow question: how do you get the goods now and part with the cash later. Five other routes do the same job, and each recovers the cost of the time in a different way: in the price, a deposit, interest, a fee or a discount.
This comparison names the actual accounts and programs, because "supplier terms" is not something you can open.
What to take away
- Net-30 vendor accounts, Crown Office Supplies and Quill among them, move your payment date by about thirty days and report to Dun & Bradstreet, Experian or Equifax on their own calendar.
- A business card's float ends at the statement, and the same card becomes the most expensive row on the table the moment you carry a balance.
- A CD-backed secured card from a bank such as Wells Fargo prices the time in a locked deposit, not in interest.
- An SBA 7(a) loan or a Community Advantage loan is the only row that states its price openly as a rate plus a fee.
- Invoice factoring and merchant cash advances are the two most expensive routes, and neither is a loan.
Six routes, by name
Who provides the time
- Net-30 vendor account (Crown Office Supplies, Quill, Uline)
- The vendor
- Longer vendor terms (net-60, net-90)
- The vendor, longer
- Business credit card float (Chase Ink, Amex Blue Business)
- The card issuer, to the statement
- CD-backed secured card (Wells Fargo Business Secured)
- The bank, against your deposit
- SBA 7(a) or Community Advantage loan
- The lender, with an SBA guarantee
- Invoice factoring or a merchant cash advance
- A financier, against money owed to you
What it costs
- Net-30 vendor account (Crown Office Supplies, Quill, Uline)
- Priced into the goods
- Longer vendor terms (net-60, net-90)
- A firmer price or a lost early-pay discount
- Business credit card float (Chase Ink, Amex Blue Business)
- Free if cleared, interest if carried
- CD-backed secured card (Wells Fargo Business Secured)
- A locked deposit, not a rate
- SBA 7(a) or Community Advantage loan
- A published rate plus a guarantee fee
- Invoice factoring or a merchant cash advance
- A discount on each invoice, or a daily holdback
What it needs first
- Net-30 vendor account (Crown Office Supplies, Quill, Uline)
- An EIN, a business address, a trade reference
- Longer vendor terms (net-60, net-90)
- A payment history the vendor can see
- Business credit card float (Chase Ink, Amex Blue Business)
- A personal guarantee on most applications
- CD-backed secured card (Wells Fargo Business Secured)
- The deposit itself
- SBA 7(a) or Community Advantage loan
- Underwriting, collateral, often a guarantee
- Invoice factoring or a merchant cash advance
- Customers whose invoices are worth advancing
The last row does not move what you owe. It accelerates what you are owed, and it puts a third party between you and your customers.
Six Ways to Move a Payment Date
Net-30 vendor
- Who provides time
- The vendor
- What it costs
- Priced into goods
- What it needs first
- EIN, address, reference
- What it moves
- What you owe
Card float
- Who provides time
- The card issuer
- What it costs
- Free if cleared
- What it needs first
- Personal guarantee
- What it moves
- Statement date
SBA loan
- Who provides time
- The lender
- What it costs
- Rate plus fee
- What it needs first
- Underwriting, collateral
- What it moves
- What you owe
Reading the table
Crown Office Supplies, Quill and Uline all issue net-30 terms to businesses with an EIN and a business address. Whether any of them reports to Dun & Bradstreet, Experian or Equifax is set by the vendor's own published terms, not by the terms you were granted.
A supplier extending thirty days is financing you and recovering it somewhere, usually in the price or in a discount you forgo. Invisible is not free. It is often still cheaper than the alternatives, and the arithmetic for comparing them sits in the vendor accounts calculator.
Card float covers the gap to the statement and stops there. The structure of what it costs once you carry a balance is set out in credit cards cost.
A CD-backed card works differently. Wells Fargo's Business Secured card prices the time in a deposit you cannot spend while the account is open, which is a real cost but not interest. The tradeoff is covered in secured business credit.
An SBA 7(a) loan states its price as a rate plus a guarantee fee. That is its advantage: you can compare it, budget it, and decline it on the numbers. Under SBA's 7(a) lender terms, interest rates are negotiated between the borrower and the lender but are subject to SBA maximums pegged to the prime rate or an optional peg rate, and may be fixed or variable. The same terms say lenders pay an upfront guaranty fee on each 7(a) loan and are permitted to pass that fee on to the borrower, so ask whether it has been. It usually demands collateral and a personal guarantee in return.
Which route for which problem
A small, recurring gap is what net-30 vendor accounts were built for. The vendor already profits from the sale, so the time is the cheapest part of the deal.
A large one-off gap is better served by a facility than by stretching terms you were granted for ordinary purchasing.
A gap that exists because customers pay slowly is not a financing problem. Fixing collections is unglamorous and usually cheaper than factoring.
A seasonal gap is normally handled with two things at once: net-30 terms for routine purchasing, and a facility held but rarely drawn for the peak.
What the comparison cannot settle
None of these routes tells you whether the account will report anywhere. That is a separate axis, and it is the reason the same mechanisms get compared again in net-30 accounts examples.
None of them prices the relationship either. A vendor who carried you through a bad quarter has given you something no table shows, and that same relationship can be withdrawn mid-season.
For a neutral overview of the lending routes in the bottom half of the table, the SBA's material on funding your business and its outline of loan programs set out the ground without a product attached.
Common questions
Is net-60 simply better than net-30?
It is more time, and time usually costs something. Longer terms are frequently traded against price or against an early-pay discount, so compare the whole offer rather than the number of days.
Can I hold several of these at once?
Yes, and most businesses do. The thing to avoid is holding several because each was easy to obtain rather than because each solves a different timing problem.
Which route is best for building a credit record?
Whichever one you would use anyway, among those that report to the bureaus. Paying more for a mechanism just to build a record usually costs more than the record is worth.
Where do I check what a vendor reports?
Read the vendor's own published credit terms and the bureau's own product pages. For questions about your file at Dun & Bradstreet, Experian or Equifax, or about a dispute, work with a licensed business credit attorney.
