Trade Credit
An arrangement where a supplier allows a business to receive goods or services now and pay for them later, typically within 30, 60, or 90 days.
Trade credit is one of the most common informal financing sources for small businesses, extended directly by a vendor rather than a bank, and it’s usually interest-free within the agreed payment window but can carry late fees or lost early-payment discounts if missed.
Strong, consistently repaid trade credit relationships can also support a business’s credit profile and vendor references when applying for other types of financing later on.
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