What are net terms, and how do I get them from suppliers?

Net terms let you receive goods now and pay the invoice later. "Net 30" means payment is due 30 days after the invoice date; net 60 and net 90 work the same way. Suppliers grant them when they trust you to pay, so you usually earn them by starting small, paying on time and sharing a clean business profile.

How net terms work

On a net 30 order, the supplier ships, sends an invoice, and you pay within 30 days. Some suppliers add an early-payment discount for paying within a shorter window, such as 10 days, and otherwise the full amount is due in 30. In trade finance this arrangement is called "open account" (see the trade.gov Trade Finance Guide). It helps the buyer's cash flow and puts the payment risk on the seller. That is why suppliers are careful about who gets it.

Why suppliers say no at first

When a supplier ships on credit, it is lending you money. A new customer with no payment history is a risk, especially across borders where collecting is harder. Many suppliers start new buyers on prepayment, a deposit or a payment at shipment. Wanting that is normal.

How to get net terms

1. Start with a smaller order, pay it promptly and ask about terms for the next one.
2. Pay on time every time. Supplier payment history is what supports a request.
3. Offer references. Other suppliers who have extended you terms, and your bank.
4. Share a clear profile. Company registration, years in business, a website, and what you sell and to whom.
5. Ask for a specific term in writing. "Can we move to net 30 after our third order?" is easier to say yes to than a vague request.
6. Offer a partial deposit. A deposit with the balance on terms can bridge the first few orders.
7. Consider trade credit insurance or a standby letter of credit if the supplier is hesitant. Ask them what they would accept.

Put the agreed terms, due dates and any early-pay discount on the invoice or purchase order.

What to do when a supplier won't give terms

Some suppliers, especially overseas factories, simply don't offer them. You can still protect your cash flow by paying with a business credit card where the supplier accepts one. The supplier is paid now, and your money leaves your account when the statement is due.

Where Shield fits

Shield's business credit card gives you a billing cycle on supplier purchases even when the supplier won't offer terms. It is a pay-in-full card, so there is no interest, and the statement balance is debited automatically from your connected account on the monthly due date. Limits are based on your company's revenue, cash flow, reserves and operating history, with no personal credit check and no personal guarantee. There are no upfront or subscription fees for cardholders. Where a supplier takes only wires, you can send a wire from your credit line. Owners can live outside the US, with a US company.

FAQ

Is net 30 the same as a credit card? No. Net 30 is credit from the supplier. A card is credit from the card issuer, and the supplier is paid up front.

Can a new business get net terms? Sometimes, but many suppliers want a track record first. Start small and build history.

What happens if I pay late? It depends on the supplier's terms. Check the invoice or agreement, and talk to the supplier before the due date if you need more time.

Next step

To see how Shield's business credit card works for supplier purchases, visit Shield business credit cards.