Trade Credit

Trade credit is a type of financing arrangement where a supplier allows a business to purchase goods or services on credit, deferring payment until a later date. This arrangement gives the buyer more time to pay, often within 30, 60, or 90 days, and helps businesses manage cash flow, build relationships with suppliers, and keep operations running smoothly without immediate capital. Trade credit is a crucial tool for businesses, especially small or growing companies, to manage short-term financial needs and inventory without upfront costs.