Free credit application form

How to fill it in

The applicant completes the business details and references; the supplier fills in the credit limit and terms once it approves. Be complete and accurate, since the supplier relies on this form and follows up with the references you list.

• Business information: enter the legal name, any DBA, the entity type, the EIN, the state of formation, and the physical and billing addresses.
• Owners: list each owner or officer with title and ownership share, and add the Social Security Number only for an owner who will sign the personal guaranty.
• Requested credit: state the credit limit and terms you want, such as Net 30, and your estimated monthly volume.
• References: give three trade references and one bank reference, each with a contact name and phone number so the supplier can verify them.
• Authorization and guaranty: read the authorization and, if an owner is guaranteeing the account, the personal guaranty, then have the authorized owner or officer sign.
• Governing law: choose the state whose law applies before signing.

What suppliers check and how they decide

A supplier uses the application to build a picture of how you pay. It contacts the trade references to see whether you pay other vendors on time, confirms the bank reference, and usually pulls a business credit report. The main business bureaus are Dun and Bradstreet, Experian Business, and Equifax Business, and each keeps its own file and score. Dun and Bradstreet builds its file around a D-U-N-S number, a unique nine-digit business identifier, and its PAYDEX score runs from 1 to 100 based only on whether you pay suppliers on time, with 80 and above treated as low risk. Experian and Equifax have their own business scores. If an owner signs the personal guaranty, the supplier may also review that owner's personal credit. None of these scores decide the application by themselves; the supplier weighs them alongside the references you provide and the size of the limit you request.

Credit terms explained

The credit terms set when you pay and what happens if you pay late, so read them before you sign. Net 30 means the full invoice is due 30 days from the invoice date; Net 60 gives 60 days. Late balances usually carry a finance charge, commonly written as 1.5 percent per month, which works out to 18 percent a year. Because states cap interest at different levels, a well-drafted term pairs that rate with the phrase or the maximum rate allowed by law, so it never exceeds your state's usury limit. You may also see an early-payment discount written as 2/10 net 30, which means you take 2 percent off if you pay within 10 days, otherwise the full amount is due in 30. On a 1,000 dollar invoice that is 980 dollars by day 10 or 1,000 dollars by day 30. The supplier can also raise, lower, or pull the credit limit as your account history builds.

The credit-check authorization and the FCRA

The authorization clause is what lets the supplier verify your references and pull credit reports, so signing the application gives that permission. This matters because of the Fair Credit Reporting Act, the federal law at 15 U.S.C. 1681 that governs consumer credit reports. Anyone who pulls a consumer report needs a permissible purpose, and your signed authorization supplies it. There is a business-versus-personal line worth understanding. The FCRA is built around consumer reports, so pulling a report on a company has limited coverage, but the moment an owner signs a personal guaranty or applies as a sole proprietor, that person is personally on the hook and the supplier may review their personal credit report. In short, the guaranty is what brings an owner's personal credit into the picture, and the application is where they agree to it.

The personal guaranty

A personal guaranty is the clause where a business owner agrees to be personally responsible for the account if the business does not pay. Suppliers commonly ask for one when the business is new, small, or closely held and has no long credit history of its own, because it gives them someone to collect from. It is a real obligation, not a formality: if the business defaults, the supplier can pursue the guarantor's personal assets, which can include bank accounts and, through a court judgment, wages. To be enforceable a guaranty has to be in writing and signed by the guarantor in a personal capacity, since an oral promise to answer for another's debt generally fails under the Statute of Frauds. If you are asked to guarantee an account, know that you are putting your own credit and assets behind it, and negotiate the limit or ask for a cap if that concerns you.

If your application is denied

Business credit is covered by the Equal Credit Opportunity Act, the federal law carried out through Regulation B, which bars a creditor from discriminating against an applicant and is enforced by the Consumer Financial Protection Bureau and the Federal Trade Commission. If a supplier turns you down, Regulation B still gives you rights, though trade credit follows a lighter rule than a consumer loan. For most trade-credit applicants the supplier has to tell you the action it took within a reasonable time, and it has to give you the specific reasons for the denial only if you ask in writing within 60 days. If you are declined, it is worth asking for those reasons; the answer is often a thin file or a missing reference you can fix and reapply. Keep in mind that a supplier is not required to extend credit, only to follow the law in how it decides.

Signing it

A credit application is complete once an authorized owner or officer signs it, and the same signature can give the personal guaranty when an owner signs in an individual capacity. It does not normally need to be notarized or witnessed; a signed application and guaranty are enforceable on the signature alone. You can print it and sign by hand or fill it in and sign online, which gives the supplier a clean dated copy to keep on file. Online signing is valid for a credit application and guaranty under the ESIGN Act and UETA. After signing, send it to the supplier with any resale or tax-exemption certificate you referenced so they can open the account without delay.