Enter to open, tab to navigate, enter to select
Trade Credit
Practical Law Glossary Item w-017-6634 (Approx. 2 pages)
Glossary
Trade Credit
A type of credit that is extended when a customer purchases goods or services on open account, taking delivery of the goods or services first, and making payment to the supplier later. Trade credit is usually categorized according to its tenor:
- Short-term trade credit refers to accounts receivable that are payable in 30 to 90 days.
- Medium-term trade credit is payable in one to five years.
- Long-term trade credit is payable over a term longer than five years.