Trade Credit

Trade Credit – (TC), A tool for building a solid, positive and rewarding financial ‘record’. Establishing trade credit builds credit-worthiness, credit-referrals and favourable ‘partnerships’ that tend to showcase fiscal responsibility. Doing business with, ordering products and services, receiving invoices for that (in effect the sellers are extending credit to you and your business), for a period of time, in trust and good faith, builds strong ties and good fiscal reputation. Customer orders and invoices are good examples of the nuts and bolts of this process. It states terms of payment and agreement to pay implied upon receipt of goods and invoice. (15-45 days to pay) . Non-payment of trade credit can lead to (i) additional charges added to the account, (ii) temporary suspensions, (iii) revoking of any credit privileges. For good paying consumers there might be a line of revolving credit established, with credit limits based on the credit rating of the client, pending that (a) minimum monthly payment is received on time. (b)finance charges are paid along with the principle balance.