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.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005

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References in periodicals archive

[H.sub.a3]: Access to short-term bank credit received is positively related to trade credit extended.

Determinants of Trade Credit Extended by Manufacturing Firms Listed in Pakistan

Jon is a recognized leader in the trade credit insurance industry with more than 18 years of experience.

Jon Handen Joins Atradius as Senior Manager for SPU

Casey Bell, Head of Trade Credit GCC at AIG says that the trade credit insurance sector is set to bolster UAE trade, especially in volatile times.

Stimulating trade activity

Summary: Casey Bell, Head of Trade Credit GCC at AIG says that the trade credit insurance sector is set to bolster UAE trade, especially in volatile times

Stimulating trade activity

With the Bank of England recently cutting its outlook for UK growth amid growing economic turbulence, trade credit insurance continues to provide cover and reduce the risk to small businesses if customers that owe them money do not pay their debts or pay them late.

Small firms net gainers with insurance claims

One alternative financing channel is trade credit. Cull et al.

Two forms of trade credit finance in China

Updated banking regulations and a greater ability for banks to benefit from the financial strength of insurers are helping banks and lending institutions use trade credit insurance to bolster their bottom lines and better meet regulatory standards.

Banking on growth: Basel III bank standards are creating opportunities for insurers

M2 PRESSWIRE-August 21, 2019-: Trade Credit and how businesses can take advantage of it

Trade Credit and how businesses can take advantage of it

Summary: Etihad Credit Insurance (ECI), the UAE Federal export credit company, has announced the launch of 'SME Protect', an export trade credit solu...

ECI launches export trade credit solution

There were 5,114 new trade credit insurance claims made in the first quarter, up six per cent on the previous quarter to their highest level since the second quarter of 2009, after the financial crash.

Bad debt insurance claims at highest since 2009