SPOC Secretariat

Small or medium sized businesses often face problems relating to capital and can run into debts or bankruptcy if not managed properly. Trade Credits can prove to be a boon for such businesses because there is no need for immediate capital investment under a trade credit agreement. Under such agreements, firms provide trade credits to their customers wherein goods and services are delivered to the customer with an agreement to make a payment at a later time. Trade credits are often based on credit reports so a a business owner it is very essential that you maintain your won business credit report. Moreover, trade credits are also hard to establish because it also involves a good relationship with the firm that you are dealing with and a regular payment schedule. Trade credits can also some times create problems such as Excess Stock for borrowers or cash flow problems for companies offering it.