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Trade Credit
(redirected from Trade Credits)

   Also found in: Wikipedia 0.01 sec.
Trade credit
Credit one firm grants to another firm for the purchase of goods or services. That is, when the goods are delivered, the recipient does not have to pay immediately for the goods - a credit is given with terms for payment (say 30 days). This potentially allows the vendor to sell the goods and use the sale proceeds payoff the credit obligation.

Trade Credit
A loan or line of credit that a company extends to another in order for the second company to buy goods and services, especially those necessary to conduct its operations.


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The purpose of this paper is to demonstrate the relationship between trade credits and bank loans through investigating SMEs operating in the textile sector in Turkey.
Specifically, the task force determined that, in reporting the exchange of a nonmonetary asset for barter or trade credits, it is presumed that the fair value, as determined by the market of the nonmonetary asset exchanged (receivables, inventory, capital equipment, real estate or leases) is more clearly evident than the fair value of the barter or trade credits received.
In return, the corporate trading company delivers a multiple of the cash received in trade credits to the seller.
 
 
 
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