Supplier and Merchant-based Credit
by T.
M.
Hoy
In a tough economy, financing is hard to find.
One often overlooked source of financing for businesses
is trade credit, that is - credit available from your suppliers, and lenders interested only in your...
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Supplier and Merchant-based Credit
by T.
M.
Hoy
In a tough economy, financing is hard to find.
One often overlooked source of financing for businesses
is trade credit, that is - credit available from your suppliers, and lenders interested only in your cash
flow.
Trade credit surpassed bank lending as a source of finance for US businesses last year, with trade
credit providing $2.
15 trillion versus $1.
5 trillion in total bank lending (down 6.
5% from the previous
year), according to the US Federal Reserve.
These figures don t include merchant-based credit, or other
sources of alternative finance.
This business-to-business financing (or B2 B) is the largest source of credit for most companies in the
US and Europe.
Walmart uses it heavily, more than bank borrowing, and in the developing world some
of the only data available to check the credit for personal and small business loans comes from this
kind of credit (according to the National Survey of Small Business Finance or NSSBF).
Less
