trade credit

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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.

trade credit

a deferred-payment arrangement whereby a supplier allows a customer a certain period of time (typically one to two months) after receiving the products in which to pay for them. See CREDITORS, CREDITORS RATIO, WORKING CAPITAL.

trade credit

a deferred payment arrangement whereby a supplier allows a customer a certain period of time (typically two to three months) after receiving the products before paying for them. See also CREDIT, CREDITORS, WORKING CAPITAL.
References in periodicals archive ?
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.
France has delayed the renewal of trade credits (US$160 million for agricultural commodities, primarily wheat and flour; and US$20 million for machinery) to Cuba due to non-payment of a significant, although unspecified, portion of the US$180 million in trade credit guarantees provided to Cuba in 2000:
The new site will allow clients to securely view their individual accounts and assist them to more effectively utilize their trade credits for the acquisition of media, goods and services.
An increasing number of Japanese companies are selling trade credits to raise funds amid the credit crunch, a business daily reported Friday.
A business uses its trade credits to purchase goods or services offered by other members.
But when I first tried barter in the 1980s, I faced two problems that are fairly typical of other firms' experiences with the barter process: When we tried to exchange our trade credits for media, we found the TV and radio advertising time the barter company offered was often the worst time slots--late at night, for example.
The initial cost of this media campaign is estimated to be $1,000,000 with a portion paid in cash and the remainder in trade credits generated through the barter of its products and services to IGT.
As a result of this strategic alliance, First International Bank will allow many of Active's clients to monetize their trade credits prior to utilizing them to acquire media, goods and services.
In addition, a qualified third party supplier of other goods and services such as printing or telecommunications, with its own media budget, may also accept the client's trade credits for use in its media buy plan.
The Government of France says it will increase trade credits to Cuba from the current US$175 million to US$200 million in 1999, and development aid from US$354,000 to US$2.