Business credit refers to the summary of a business’s financial history, which indicates its ability to repay its debts and other financial obligations.
There are various options to establish or improve your business credit. Some of the different types of business credit include:
Business Credit Card: A business credit card provides an easy way to begin building business credit as it sets a credit limit, just like other credit cards, with funds that are paid off each month when used.
Line of Credit: A line of credit works similar to a credit card as it provides funds that are available to use when needed. You only pay interest on the amount of credit you use.
Term Loan: The typical, traditional loan offered by a bank or other lender is a term loan, which allows the business to borrow a sum and pay in installments.
Vendor Credit: Businesses can purchase products or services using vendor credit, in which the purchases are made by financing the cost.
Service Credit: Service credit includes utilities and other bills in the business’s name, such as internet and phone lines.