Supplier credit accounts for new business

[toddmeister]

Hi all,

Just wondering is there a "norm" or guideline for a trading period before suppliers will allow a startup to have a credit account?

For example is it common to have to pay, say 3 months on proforma to build up some trading history first?

This would be based on a totally new company with no credit history other than my own personal credit rating (would that even be considered)

Obviously each supplier will have their own way of doing things but just wondered if there was a general "rule of thumb?"

Many thanks


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[Breaking Good]

I don't know about a general rule of thumb but of course each supplier will have their own policy I guess. Your best bet would be to drop them a note as you pay your first proforma and ask them how many orders you'd need to pay off before you obtain a credit account.

I'd imagine most would judge it based on "number of orders" as opposed to "length of time"

 

[k100danny]

Totally depends on the supplier, I have a company i have dealt with for 4 years and they do not offer credit terms and all of our invoices are proforma, I have a new supplier i have recently managed to secure and we went over for a meeting, placed a very large order and was expecting a pro forma, I got an email saying the invoice and packing list would be sent when our goods were loaded for shipment, the invoice came after the goods with 30 day payment terms and that was for over 30k, we don't have a bad credit rating but certainly wouldn't come up that well so i think it depends.

I would say as a general rule though that suppliers verge on the edge of caution and 6 months would be roughly the time asking for a credit account might be ok.

 

[toddmeister]

Thank you


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