The home improvement retailer Menards offers a trade credit program that can help business owners build credit. Menards sells supplies to contractors, so its trade credit program is designed for contractors and it even offers a contractor card that specifically provides credit to contractors. But many small businesses don’t qualify for business credit cards, so Menards also offers another trade credit plan.
The Menards Net 30 Program
Menards offers trade credit through the Menards Commercial Card program. Customers who sign up for this plan can choose one of two billing options. If you select the Menards Commercial Card with the statement billing option, this is roughly equivalent to a Net 30 program, although Menards doesn’t call it that. You pay the statement at the end of each month, and a month has about 30 days. Each individual purchase shows up on the invoice you receive at the end of the month. So Menards has a Net 30 trade credit program.
The Menards Commercial Card also allows contractors to choose a second option, invoice billing. This is a Net 50 program that gives contractors another 20 days or so to pay their bills. If you select this option, you receive a separate invoice for each purchase.
You have to select either statement billing (Net 30) or invoice billing (Net 50) when you set up your Menards trade credit account. You can’t change the billing method later. So if you pick the Net 30 billing option, you can’t change the account to Net 50 if you need more time to pay your bills in the future.
Personal Guarantee Requirements
The Menards website doesn’t say anything about whether the Menards Commercial Card requires a personal guarantee from the business owner, but it is possible to find out more information about the trade program from another source. Menards offers trade credit through a partnership with Capital One. This bank issues the Menards credit cards and finances the short-term loans to contractors. So Menards payment cards are actually Capital One credit cards and more information about how the trade credit program works is available on the Capital One website.
According to a forum post on myFICO, Capital One requires a personal guarantee from a business owner before it will offer trade credit to that business. Since Capital One is managing Menards’ trade credit program, this means that Menards cardholders will have to provide personal guarantees to the bank as well.
Menards Late Payment Fees
If you select Net 30 billing, the late payment fee is 1.5 percent of the bill. But if you select Net 50 billing, there’s also a minimum penalty of $10. As a result, you will pay a higher percentage of the bill in penalties if you miss the deadline for a lower-value invoice. For example, if you spent $250 at Menards and waited more than 50 days to pay the invoice, the $10 fee would be 4 percent of the total bill.
Creating Subaccounts
If your business has a Menards account, you can obtain trade credit cards for your employees and Menards will allow them to make purchases on the same account. This feature is convenient because you won’t have to travel to the store yourself if your employees can pick up supplies instead. Menards also gives you a SmartView app that helps you manage these subaccounts.