To Extend Trade Credit or Not To Extend Trade Credit - 0 views
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James Hudson on 04 Jul 13To those who do not fully understand trade credit, it may seem like a risky move. After all, extending trade credit essentially means allowing your small business to function much like a bank. Rather than asking your customers to use small business credit cards to manage cash flow, you can give them extra time to pay (30 days is standard). By extending payment terms, you are managing a credit risk in much the same way that the credit card company would have. It can be a risky undertaking. But more and more small businesses are starting to extend trade credit. In fact, the decision to extend trade credit is exactly what is keeping many small businesses afloat.