Trade Reference

[fattony]

Hi

Im looking at opening a trade account with a supplier and the online form asks for:

Trade Reference 1
Trade Reference 2
Trade Reference 3

Plus telephone numbers and contact names for all 3, I'm assuming they just want a company name who can vouch for our business, but being a new business its hard as we only have 1 other trade account, could I put our bank manager down as 1?

Also what does this statement actually mean?



NB – If the customer is a limited liability, and the company was incorporated in the last six years, the continuing guarantee below must be completed by either a company director or the company secretary. To: Enterprise Security Distribution Limited.

In consideration of Enterprise Security Distribution Limited agreeing to grant credit to the company applying for credit herein ('the company') i hereby unconditionally and irrevocably guarantee the due and punctual performance and observance of all terms and conditions and covenants contained herein on the part of the company, and as primary obligor and not merely surety agree to indemnify and keep you indemnified against all action losses proceedings damages and expenses whatever arising as a result of any failure by the company to comply with the terms of this agreement.

By printing your name below you agree to the above and our Terms & Conditons.

Their terms and conditions page returns a 404 error

 

[seanstevens]

They are looking to talk to your other suppliers and need your permission to ask the questions (more than likely they will send a few written questions). It is a very old fashioned way of doing a credit check and to be honest a waste of time.

Your bank manager would probably not give you a "trade" reference and would have to supply a "bank" reference, these are generic responses and do not give any real information.

What is your own credit like? I guess you are a limited company and if so, have you run a report on yourself? if not drop me a note and I'll send you a free one on your company.

I have been a credit manager for the past 15+ years and have only used trade references twice.

The wording they have sent you basically (they are making it over complex for the sake of it) means that by signing you are agreeing to their terms and conditions (especially their payment terms) and if you pay late they will charge you for it.

 

[GRDCredit]

I agree with everything Sean says except my interpretation of the wording is that the signatory to the form will be guaranteeing any debt - i.e. if the company fails to pay then they will call upon the signatory for payment

 

[nextdayprint]

Unsecured credit isn't easy to come by at the moment and nor should it be. I have cut the number of new clients I give credit to, to almost zero, and this has really made a difference for my business. Whilst it's still not nice to watch clients going under, at least they aren't dragging me with them.

 

[nextdayprint]

Saying that, I am trying to lease a unit for a new business venture and that is a pain in the arse! The landlord wants, bank reference, 3 trade references and a current/recent landlords reference, and over all of that he wants personal guarantees from the directors in our ltd company for the full 6 year lease, with no opt out clauses... he hasn't asked for our first born yet, but think it might be on the cards :S

 

[fattony]

Can they ask for a guarantee?

I though the whole purpose of ltd was limiting your liability, so if for whatever I never got paid for an installation say £10k and because of this I couldn't pay my supplier the company could go under without affecting my home or personal possession, with this company I'd be personally liable

 

[Williams lester]

Can they ask for a guarantee?

I though the whole purpose of ltd was limiting your liability, so if for whatever I never got paid for an installation say £10k and because of this I couldn't pay my supplier the company could go under without affecting my home or personal possession, with this company I'd be personally liable

Can they ask for a guarantee? Yes

Do you have to give one? No....just don't open an account with them!!

 

[Barnie]

or you could just phone them explain you are a new business and only have 1 trade reference and then negotiate some terms with them.

we have lots of one man business on our books who are in the same position, they get quite nerved by all the credit checks etc

we offer a special simple rules for new and small business where we build up confidence in sales between us and then we build up their terms and credit if needed


the smaller companies often do better for us as well so its a 2 way thing

 

[Atilla]

Can they ask for a guarantee?

I though the whole purpose of ltd was limiting your liability, so if for whatever I never got paid for an installation say £10k and because of this I couldn't pay my supplier the company could go under without affecting my home or personal possession, with this company I'd be personally liable

Tony Streams doesn't take chances (overall owner of Enterprise).
The main people at each branch also have a stake. Each branch is a limited company.

They are simply covering their arse. When you consider the size of the black holes Norbain are left with you can see why they take this approach.

 

[termsandconditions]

Hi

Im looking at opening a trade account with a supplier and the online form asks for:

Trade Reference 1
Trade Reference 2
Trade Reference 3

Plus telephone numbers and contact names for all 3, I'm assuming they just want a company name who can vouch for our business, but being a new business its hard as we only have 1 other trade account, could I put our bank manager down as 1?

Also what does this statement actually mean?

NB – If the customer is a limited liability, and the company was incorporated in the last six years, the continuing guarantee below must be completed by either a company director or the company secretary. To: Enterprise Security Distribution Limited.

In consideration of Enterprise Security Distribution Limited agreeing to grant credit to the company applying for credit herein ('the company') i hereby unconditionally and irrevocably guarantee the due and punctual performance and observance of all terms and conditions and covenants contained herein on the part of the company, and as primary obligor and not merely surety agree to indemnify and keep you indemnified against all action losses proceedings damages and expenses whatever arising as a result of any failure by the company to comply with the terms of this agreement.

By printing your name below you agree to the above and our Terms & Conditons.

Their terms and conditions page returns a 404 error

Dear fattony

It's the supplier's clumsy way of incorporating a guarantee within an online credit account application. Setting aside the woefully inadequate wording of the guarantee, the dodgy link to their terms and the fact that they will be hard-pressed to enforce such a document especially without a signature, your supplier is entitled to ask for a personal guarantee particularly from director/s of new companies with no/poor credit rating. And, after all, if you're not prepared to support the transaction with a director's guarantee, then why should they?

Trade references are useful because credit reports leave a lot to be desired and by their nature rely on historic data. Trade references can unearth unreported and fresh information such as general trustworthiness and any payment delays.

Best Regards

 

[estwig]

One of the main reasons for asking for references from other trade suppliers, is to keep Joe Public at bay. A good trade supplier will not offer an account with discount prices to just anyone, we will try and protect his account holders prices.

Magnets do this very well, they produce a catalogue with prices and discounts for the public, then another 'secret squirrel' catalogue, with bigger discounts for their account holders.


How you get a trade account when you need a reference from 3 trade accounts, is a problem you have to overcome.