What is Trade Credit?
Trade Credit refers to credit in business dealings like selling goods on credit where the customer promise to pay money later, buying goods on credit were we being the customer of supplier promise to pay to the supplier on a later date. It is given on the basis of the financial capability of the borrower i.e. credit taker.
In some cases, it is given on the basis of a relationship with the person asking for credit or it depends upon the rules of business. In a large organization, the rules for credit is the same for all the customers.
