Question: I opened a children's clothing store and am amazed by how many companies require cash upfront before they will ship me product. My personal credit has always been good, but when it comes to my business, that doesn't seem to count. Any advice?

Answer: Don't take it personally. Getting vendors to extend credit is one of the toughest challenges startup businesses face. Because startups typically have limited, unpredictable or even negative cash flow, vendors generally don't want to risk shipping products or providing services to customers who may not be able to pay--or who may even file for bankruptcy and close their doors. Although a business owner with strong personal credit can easily obtain a credit card for his or her company, credit card fees are often hefty, and suppliers may not accept credit cards for large purchases.

That's why it's important for new companies to establish a solid repayment history with vendors before asking for credit, says Sol Wahba, president of Nuvo Accessories Ltd. and vice president of The Sephardic Angel Fund, a New York City-based organization that provides consulting services and funding to small businesses. Once your company has "trade references" who can vouch for your company's creditworthiness, you'll generally be able to establish "net 30" payment terms that give you up to 30 days to pay for products and services. Some vendors may also ask to see financial statements and cash flow projections. "Start small and build trust," Wahba advises. "Vendors want to know the person behind the business."

Originally published in the March 2007 issue of Entrepreneur Magazine