B U I L D I N G A W A L L O F
B U S I N E S S C R E D I T
INDUSTRY
INSIGHT
THREE
PATHS TO
IMPROVEMENT
In part two of this article, we discuss three specific ways any FFL can
begin to build and improve their business credit rating.
By Josh Fiorini
In part one of this article, I discussed why
having established credit for your FFL (Federal
Firearms Licence) provides your business
fl exibility, can stave off the wolves when times are
lean and even improve your turn rates. Here are
three ways you can begin to establish your FFL’s
business credit or improve a credit profi le you’ve
already begun.
1. DO BUSINESS WITH VENDORS WHO REPORT
No matter what sector of the industry you are in,
you have to make purchases. In the case of small
businesses in particular, many have a tendency to
do two things that are counter-productive in the
long run: excessively using debit cards or making
cash purchases and doing business exclusively with
small local vendors or ‘buddies’. While shopping
small can have its advantages, it can also be a
surefi re way to not have a business credit rating
when you need it.
It is important to have a mix of larger companies
within your vendor pool, because those companies
will off er terms (which you should seek and accept
even if you never intend to use them), and those
companies will report to Dun & Bradstreet (D&B),
the small-business equivalent of Standard & Poor’s
or Moody’s. D&B maintains a creditworthiness
28 www.guntradeworld.com
database on thousands of small businesses via its
system of ‘DUNS numbers’. So, not only does
doing business on terms with a large vendor give
you a powerful trade reference, it also begins to
establish a reporting history on your business (note
I said business, not on you as an individual).
D&B will assign your business a number and
establish a fi le, without you having to proactively do
anything, if you begin to do business with a vendor
that reports (simply ask that vendor’s receivables
department to make that determination). You
can also contact D&B to begin working together
directly to build your business credit fi le. When the
day comes that you have a healthy score attached to
your DUNS number, credit becomes easy both with
trade and bank partners, just as with your personal
FICO score and even if you never use it.
2. TERMS = TURNS
As I’ve said, doing your purchasing on terms with
trade partners can be a powerful thing, whether
or not those partners report on your account. Th is
is a massively important and often overlooked
component of our global fi nancial system and is
no less important to the fi rearms industry. Among
non-fi nancial companies internationally, trade
credit (measured by accounts payable) amounts to
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