2. definition Trade credit is when a company provides goods or a certain service to a customer and they agree to collect the sum of money later or if u get a shipment of good from a supplier then u have an agreement to pay them later. You mighty have heard of this on TV adverts like DFS the sofa shop. You can get the sofa delivered then you have a certain amount of time to pay within. There are many forms of trade credit in common use. Various industries use various specialized forms. They all have, in common, the collaboration of businesses to make efficient use of capital to accomplish various business objectives. (wiki.com)
3. Cash discounts aren't the only factor you have to consider in the equation. There are also late-payment or delinquency penalties should you extend payment beyond the agreed-upon terms. These can usually run between one and two percent on a monthly basis. If you miss your net payment date for an entire year, that can cost you as much as 12 to 24 percent in penalty interest. Eentrepreneur.com
