Trade References

hello guys, I have a quick question. I am starting my new car audio business online, and for some of the applications for my wholesalers and manufacturer they are asking for atleast two trade references. My problem is that, I am brand new to the business..I mean I have been dealing with car audio all my life on a personal level but nothing professional. So what am I suppose to put for this? I know it cant possibly look good to leave it blank...

You can list anyone you pay money to:
- your ISP
- your Phone company
- your suppliers
etc.

Hi Stangs400 - I run a couple of high volume e-commerce stores. When we first got started in business the same problem came up. We actually sold so much product with one vendor that we had to scale back sales to avoid constantly exceeding our credit limit and holding up our orders (we couldn't pay them fast enough to keep the product shipping even if we paid the same day we got the invoices).

The good news is that lack of sufficient credit is what keeps every industry from being completely flooded with new sites selling the same product/service that you eat on. The bad news is that it is tough to get started with if you have no credit references. The secret is to get started with one of two accounts and grow your credit at a steady pace.

One thing you can do is purchase a "letter of credit". This is an official international trade document that fully secures a line of credit from the wholesaler/vendor. The bummer with this document is that you have to fully secure it (so you take out a CD for $20,000 if you want to secure a $20,000 line of credit). The good news is that if you are consistent with paying on time for 12 months the lender with inevitably extend more and more credit to you (and better terms sometimes). If you are brand new and you have some capital to work with this is a good option.

Other than that some lenders will look at your personal credit and extend terms to you based on that merit alone, but it is really better to establish credit in your business name if you want to do more business over time.

List what you have for it. They are going to use it to determine if they should give you a line of credit. Bad news is they probably won't. Good news is you can probably still buy from them using your personal credit cards. This is ok for a couple reasons. You'll improve your credit by making and paying for large purchases, and as you develop a relationship with the vendor they will be more likely to extend terms to you in the future.