Trade credit

• Business buys a good or service and doesn’t need to pay it back straight away
• Agreed time limit for it being payed back is etablished
• Help cash flow as it can help someone recive a payment and than repay the trade credit
• Con- using trade credit could mean missing out discounts for paying up front
• Failure to pay trade credit on time can lead to problems as there is interest placed on the credit meaning that they may have to pay a fee