trade credit

(redirected from Trade Credits)

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 ?
(3.) Finally, it should be noted that Fisman and Love (2003) suggest the necessity of studying usage patterns of trade credits and bank loans of smaller firms since observation for the largest publicly traded firms in studies can hardly be generalized to the rest of the population.
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.
Since the utilization of trade credits represents future cash savings from amounts that would otherwise be disbursed, corporate trade creates value and future cash savings.
Trade credits are extended with specifics written down in short form.
However, the central bank noted that Letters of Credit and Bank Guarantees for trade credits for imports into India may continue to be issued, subject to compliance with the provisions contained in Department of Banking Regulation Master Circular on "Guarantees and Co-acceptances", as amended from time to time.
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.
Goyal, "Inventory lot-size models under trade credits: a review," Asia-Pacific Journal of Operational Research, vol.
Lamminmaki, 2005, "Trade Credits Terms: Asymmetric Information and Price Discrimination Evidence from Three Continents," Journal of Business Finance and Accounting 32, 197-236.