Northern Tool and Equipment is a regional hardware store chain that primarily operates in the Midwest and the South. While you won’t see its stores on the West Coast or in the Northeast, this is a sizable chain with 120 warehouse stores. Northern Tool is also family owned, unlike several of the other hardware store chains it competes against. As a result, many business owners might not be aware that this retailer offers a Net 30 financing program.
The Northern Tool Net 30 Program
Northern Tool offers several financing options including its own branded credit card. It also offers a Net 30 trade credit program. Like other Net 30 trade credit programs, if you sign up for this program you can pay off your bills at the end of each month and build business credit that way. If you pay the hardware store’s invoices on time, you won’t have to pay any interest charges either.
There are also two other financing programs available at this store that allow you to take out longer term loans. The bank CIT offers long-term financing on equipment purchases from the store. Northern Tool also sells store-branded Nortrac tractors and has a separate lending program just for these tractors.
Personal Guarantee Requirements
The hardware store doesn’t make loans directly to contractors. Instead, it has a partnership with Capital One. This bank operates a trade credit financing program that’s used by several other retail stores, including some of Northern Tool’s direct competitors. The hardware store has a link to Capital One’s trade credit application on its website that provides more information about qualifying for the bank’s Net 30 program. This particular application was specifically designed for Northern Tool. Other retail stores may have different terms and conditions for their Net 30 programs even if they also have partnerships with Capital One.
Capital One requires personal guarantees from sole proprietors and general partners before it will offer trade credit to a business. That indicates that it’s possible to avoid providing a personal guarantee for the Northern Tool Net 30 program if your business is registered as a corporation. However, the bank also says that it will ask for a personal guarantee regardless of business type if the business has been operating for less than three years.
Northern Tool Late Payment Fees
Northern Tool’s trade credit program requires you to pay the outstanding balance at the end of each month. If you pay the bill after this deadline, Capital One will charge you a 1.5 percent penalty plus an additional $29 late payment fee. Both fees apply to the balance at the end of each monthly statement, so if you still have an unpaid balance a month later the bank will add another $29 fee plus 1.5 percent of your current balance.
The 1.5 percent late fee is standard for Capital One’s trade credit programs. Other hardware stores will charge you similar fees if you pay a Net 30 invoice after the deadline. And late payments will show up on the credit report for your business as well because Capital One reports your business’ payment history to the credit bureaus.
Creating Subaccounts
Other hardware stores allow you to set up subaccounts that are linked to separate payment cards. They might also provide an app that allows you to manage these subaccounts. Northern Tool’s website doesn’t mention anything about subaccounts and neither does the Capital One credit application for this chain. So you might not be able to ask the hardware store to issue separate payment cards to your employees.