What Are Net 30 Payment Terms & Accounts?
Net 30 accounts are a type of credit account that vendors issue, which grants you extended payment terms at their store. They’re also one of the best tools new business owners have for generating cash flow and establishing their business credit when starting from scratch.
Here’s what you should know about net 30 accounts, including how they work with payment terms, their pros and cons, and how they compare to other types of business credit.
How Do Net 30 Accounts Work?
You probably have a rough idea of what this concept entails, but what exactly does net 30 mean?
As the name implies, net 30 accounts offer 30 days of interest-free financing. The credit term starts the day you make your purchase with the credit line. If you don’t pay off your invoice balance before the period expires, you may be subject to late payment fees or interest.
But as long as you’re on time with payments or make an early payment, you can use net 30 terms to generate cash flow while simultaneously raising your business credit score. It’s much like using a personal credit card responsibly to raise your personal credit score.
Net 30 accounts are vendor tradelines or trade credit accounts. You get them from companies that don’t specialize in issuing credit, such as an office supply company. They’re also only usable with the issuer, unlike a credit card accepted by all merchants.
That limits their ability to manage your cash flow, though they’re still beneficial if you get them with the right vendors. However, the main purpose of net 30 accounts is often to build credit, as net 30 terms on an invoice usually get reported to one or more of the business credit bureaus.
For example, say you shop at Uline weekly for shipping materials, so you apply for a net 30 billing. Once you qualify, you use it to delay paying for each purchase until four weeks later, improving your cash flow.
In addition, Uline reports your business account trade credit and invoice payment activities to Dun & Bradstreet (D&B) and Experian Business, building business credit in each of those credit reports. Note that Uline has some of the best customer service among trade credit vendors.
Reporting each net 30 payment is integral for establishing creditworthiness with business credit bureaus.
When it comes to D&B, Nav explains that “each supplier or vendor that reports payment history is considered a business tradeline account, and the payments you make to that supplier or vendor are considered a payment experience. According to Dun & Bradstreet, two tradelines with at least three trade experiences are needed for a D&B PAYDEX Score.” This was confirmed on April 7, 2025.
Net 30 Accounts vs. Net 30 Vendors
The terms “net 30 account” and “net 30 vendor” are closely related, but they’re not interchangeable, so you don’t want to mix them up.
A net 30 vendor account refers to a credit line that grants you a 30-day payment term with no interest on your outstanding balance. Meanwhile, a net 30 vendor is a business that offers net 30 accounts and usually specializes in something other than issuing credit.
For example, Crown Office Supplies is a popular net 30 account. It offers net 30 payment terms to qualified customers, granting them extended net payment terms. However, it generates most of its revenue by selling office supplies, its primary product offering.
Pros and Cons of Net 30 Accounts
Net 30 terms can be a good tool for new small business owners, but they’re not right for everyone. Here’s what you should know about their most significant pros and cons of this invoice arrangement.
Pros
Generally, a net 30 account is most beneficial for new business owners who are looking to build business credit and generate cash flow. That’s primarily due to the following advantages:
Accessible: Convincing lenders to give you invoice financing without any credit history is notoriously challenging. However, you can often secure a net 30 account as long as you don’t have any late payments or defaults, making net 30 terms a good starter credit account for business owners while also boosting cash flow.
Interest-free: A Net 30 account offers the shortest interest-free payment terms among vendor tradelines, but that doesn’t mean it’s not beneficial. After all, net 30 payment without interest accruing on your invoice balances is as much as a business credit card.
Build business credit: Many vendors report a net 30 account to one or more of the business credit bureaus. With a few of their vendor tradelines in your credit reports, you should be able to generate a business credit score and establish the foundation you need for good business credit while also boosting cash flow. You just need to be on time with payments or make an early payment here and there.
These characteristics make a net 30 account ideal for those who don’t have business credit and want to change that. However, net 30 terms isn’t always attractive for those who need a long-term financing arrangement.
Cons
Net 30 accounts offer significant benefits for new business owners who are just starting to build business credit, but they’re not perfect. Not only are net 30 terms on invoice payments of limited use in other situations, but they also have their drawbacks as credit-building tools.
Here are their most significant cons:
Potentially expensive: Net 30 terms often charge you an application fee and a recurring membership fee to maintain 30-day payment terms on your account. Since you need several to establish a solid credit foundation, they can add up quickly.
May require personal guarantee: Net 30 accounts are often available to new business owners, but they may require you to sign a personal guarantee if you lack business credit history. If you default on an invoice or make late payments, that allows the issuing vendor to come after your personal assets and your personal credit may suffer.
Limited vendor options: Unfortunately, there’s a relatively limited list of vendors with net 30 payment terms, which often forces businesses to get net 30 accounts from businesses that don’t sell something they need. As a result, you might waste money on unnecessary goods or services just to build business credit with net 30 terms.
Fortunately, you can get around the downsides of net 30 accounts by signing up for a program like eCredable Business Lift. We’ll report your existing expenses to the business credit bureaus for you, transforming them into vendor tradelines.
How Do Net 30 Accounts Compare to Business Loans and Credit Cards?
Like business loans and credit cards, net 30 accounts are financing arrangements. However, they generally don’t serve the same purposes in your credit mix, as there are significant differences between the two.
Here are the primary ones to be aware of:
- Qualification requirements: Generally, net 30 accounts are much easier to qualify for than a business loan and credit card. Many of them open even to new business owners with no business credit history, while you usually need to be well established to qualify for a business loan and credit card, or at least sign a personal guarantee.
- Where you can use them: As vendor tradelines, you can only use net 30 accounts to purchase goods or services from the company that issues them. In contrast, you can use a business loan and credit card to buy from anyone (unless otherwise stated).
- Financing structure: Net 30 accounts are a revolving form of credit, which means you can use them, pay off your balance, and use them again, like a credit card. Business loans are installment accounts, which require you to make multiple payments of principal and interest over time.
- Maximum credit limits: Net 30 accounts tend to have relatively low credit limits for business credit accounts, often starting around $1,000. Meanwhile, a business credit card may start at around $10,000, and a business loan can have principal balances in the millions.
There are significant differences between net 30 accounts and a business loan and credit card, but that’s not really a criticism against any of them. They serve vastly different purposes in your credit account mix.
Net 30 Accounts Build Business Credit
Net 30 accounts give you 30 days of interest-free financing. Ideally, you should get them from vendors you already want to do business with. That way, the account helps improve your cash flow rather than give you an extra monthly expense.
That said, the primary purpose of a net 30 account is almost always to help new business owners start building business credit. Once you’ve established a positive payment history with them, you can start applying for more beneficial credit accounts.
Net 30 vendors know this, and many of them offer net 30 payment terms primarily as a way to boost revenue. As a result, you may need to complete an order that meets a minimum dollar value to get your net 30 accounts reported to a business credit bureau.
Quill Office Supplies, for example, requires that a business owner make a $100 minimum purchase to be eligible for a net 30 term. On the other hand, a similar company, Crown Office Supplies, only has a $30 minimum purchase.
Note, however, that some brands, like shipping supplies company Uline, have no minimum purchase, so you can take advantage of net 30 terms on any order size.
The specifics will vary, so you’ll want to become fully familiar with the minimum purchase order, as well as other terms and conditions when deciding which net 30 vendors to buy from.
What Net 30 Accounts Should I Consider as a New Business?
Net 30 accounts tend to have similar characteristics, but there can still be meaningful differences between them. As a new business owner, you should prioritize those that meet the following criteria:
- Open to new businesses: Net 30 accounts are often available to businesses with little to no business credit history. However, some net 30 vendors only issue credit to businesses that already have a positive payment history with several other vendor tradelines. Double-check before you apply.
- Report to multiple credit bureaus: Since you probably want net 30 accounts primarily to build business credit, you want to pursue ones that report to as many of the major business credit bureaus as possible. Those include D&B, Experian Business, and Equifax Business.
- Issued by a vendor with a practical offering: To build business credit with a net 30 account, you need to use it regularly and establish a payment history. To avoid wasting money on unnecessary goods or services, you should target net 30 vendors that offer something you already need.
Though somewhat less important than the characteristics mentioned above, it’s also best to open net 30 accounts that don’t charge application or membership fees. These can get burdensome since you need multiple vendor tradelines to build credit.
Here are some real-life examples:
The CEO Creative (Apparel, Office Supplies, and Electronics)
Common Reasons for Net 30 Application Denials
Ideally, every vendor you applied with would accept your application and offer you net 30 terms to help improve your business credit and boost cash flow. Unfortunately, it doesn’t always work out that way.
Some vendors are more stringent with their eligibility requirements, while others are more lax.
Going back to our previous examples, Staples requires a business to have at least 20 employees, have an EIN and DUNS number, and have been operating for one year. However, The CEO Creative and Business T Shirt Club are far les strict and only require a business to be located in the US, have a clean history with no late payments, and have been around for just one month.
With that said, here are some common reasons for net 30 application denials.
Fortunately, there are several workarounds:
Step-by-Step Guidance for Implementing a Net 30 Credit-Building Strategy
Now that we know how net 30 accounts work and how to build business credit with them, let’s discuss a practical, step-by-step strategy you can use to accelerate your business credit-building.
Here’s what the implementation timeline looks like:
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Prepare: Be sure to get an EIN, set up a business bank account, and ensure you have dedicated business contact information.
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Perform a Business Credit Profile Check: See what your existing business credit profile looks like to determine how much improvement needs to be made.
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Find vendors: Identify at least five net 30 vendors that sell relevant products that your business realistically needs (pay close attention to the business credit bureaus they report to and the minimum purchase amount).
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Put in applications: Apply with the vendors you’ve selected.
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Make first purchases: Buy products from the vendors you’re approved for, ensuring you meet the minimum purchase amount for each vendor.
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Pay invoices: Pay all invoices 5-7 days before the due date, as paying early can help improve your business credit score.
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Expand: Secure tradelines with additional vendors over time, and increase purchase amounts when possible.
What Are the Alternatives to Net 30 Terms?
Net 30 accounts aren’t the only extended payment arrangements that vendors offer. Once you establish a positive payment history with enough of them, you can start qualifying for net 45, net 60, and even net 90 payment terms.
As you can guess, these give you even longer payment terms before interest starts to accrue. They also tend to have additional benefits, such as an early payment discount.
Financial tradelines, like a business loan and credit card, are also great alternatives. These build business credit, but qualifying for them is usually why you do so in the first place. They’re powerful financing arrangements that can help you grow your business.
If you’re looking for a way to build business credit as a new business owner besides net terms, one of the best options is an expense reporting program like eCredable Business Lift.
When you sign up and connect your existing expense accounts, we report them to the business credit bureaus as vendor credit. That way, you build credit without having to pay for additional goods or services you might not even need.
In addition, eCredable reports up to 24 months of payment history for each account, helping you add years of credit history to your business credit report virtually overnight. That’s one of the only ways to rapidly boost your business credit score.
Instead of paying for a dozen new vendor tradelines, you only have to pay a single $19.95 monthly subscription. Fortunately, we’ll also report that payment to the credit bureaus. Sign up for eCredable today and take the shortcut to good business credit!
FAQs
How Do You Qualify for Net 30?
Net 30 accounts are generally the easiest vendor tradelines to secure. They’re often available to new business owners with little to no business credit history. However, you should have no delinquencies or defaults and may need to sign a personal guarantee.
How Many Net 30 Accounts Should I Have?
Three to five net 30 accounts in a business credit report should be enough for you to generate a business credit score. However, you may need around 12 to 15 to qualify for the most competitive vendor and financial tradelines.
What Is a Tier 1 Net 30 Account?
Vendor tradelines are often separated into four tiers, indicating their relative levels of accessibility and credit benefits. Tier 1 net 30 accounts are the most accessible and offer the least beneficial credit terms.