Business Credit Tier 2

Tier 2

Tier 2 business credit is also known as advanced trade credit. Though it’s still a form of vendor financing, it gives small business owners access to higher lines of credit and longer repayment terms than basic trade credit.

For example, Home Depot offers a commercial acoount that grants you up to 60 days to pay. If you qualify, you’ll receive a dedicated card attached to your credit line, and the size depends on your business’s qualifications.

Though Home Depot doesn’t disclose their maximum credit limits directly, at least one third party claims they can approve you for as much as $2,000.

Advanced trade credit accounts help you round out your business credit report before you transition into more traditional business financing, such as installment loans from financial institutions.

Because they’re harder to qualify for and involve larger sums of money, they may look better as trade lines in your credit report than tier 1 accounts. As a result, you should think about applying for them as soon as you’re confident in your chances of qualifying.

Typical Credit Profile Needed for Tier 2 Credit Accounts

Tier 2 Business Credit Vendors have more restrictive qualification requirements than tier 1 providers. To get advanced trade credit accounts, you usually need between three and five tier 1 accounts with positive payment histories. You may also need to sign a personal guarantee.

For example, your business must be reasonably well-established with multiple tier 1 tradelines and a generally positive payment history to qualify for the Home Depot commercial account.

You’ll also need to sign a personal guarantee unless your business is a legal entity other than a partnership or sole proprietorship with at least ten employees, $2 million in annual revenue, and two years of operating history.

We will continue to add 6-8 vendors with on time payment to the credit profile this will give you a strong paydex score and credit history to your business profile  for funding .