Supplier Credit
Payment terms from a supplier, or bank-backed credit, that let a buyer pay after goods arrive.
Overview
Supplier credit allows a buyer to pay for goods later than delivery, either because the supplier agrees extended payment terms or because a financier funds the supplier and the buyer repays over time. It helps importers who want to receive and sell goods before payment is due.
How it generally works
- The buyer and supplier discuss deferred payment terms.
- The supplier or a financier assesses the buyer's credit standing.
- Terms such as amount, period, and security are agreed in writing.
- Goods are delivered and the buyer pays according to the agreed schedule.
Potential business use cases
- Importers buying stock they will resell within weeks or months.
- Buyers building a trading history with an overseas supplier.
- Purchases of equipment paid for in instalments.
General documentation
Requirements vary by transaction, country and institution. Commonly requested items include:
- Supplier quotation or proforma invoice
- Company registration and identification documents
- Bank statements and trading history
- Credit application form
- Details of any guarantee or security
Important considerations
- Late payment can damage the supplier relationship and may attract charges.
- The cost of credit is often built into price or interest.
- Credit decisions rest with the supplier or financier.
FAQs
Do I always need a guarantee for supplier credit?
Not always. Some suppliers extend credit on trading history alone, while others ask for a bank guarantee or other security.
How long can supplier credit last?
The period is agreed with the supplier or financier and varies by transaction.
Ready to discuss your trade requirements?
Send us an inquiry or speak to our Kano office directly. We will take you through the options and the requirements, step by step.