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 apex bank in its notification said,"It has been decided to discontinue the practice of issuance of LoUs/ LoCs for Trade Credits for imports into India by AD Category -I banks with immediate effect.
Main financial liabilities accrued were trade credits, securities and loans, whereas core financial assets were loans, trade credits, deposits, loans and share capital.
2015: How trade credits foster international trade.
Foreign lenders of such trade credits will be eligible to hedge their exposure in rupees through permitted derivative products in the onshore market with a bank in India.
The corporate trade company purchases these assets by utilizing its own private "currency," known as trade credits.
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.
Barter deal guaranteed: The diplomat explained France decided not to severely cut trade credits despite Cuba's payment problems last year, "because they met the payment schedule worked out to cover what was owed from 2000, with the last installment due in June.
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.