Trade receivables

Commercial credit is understood as the link between the customer and a company for the purpose of a purchase through the deferral of payment. Most of the companies use the commercial credit as a facility to acquire goods or services for their benefit without having the need to have the capital to pay it at the moment, it is then that a credit permit is agreed between both parties. A vote of confidence on the part of the company to the client that allows to establish the commercial relation in a relaxed but serious way.

Nowadays, commercial credit for both individuals and companies has become an advantage to promote the capitalized development that strengthens our current consumer society.

The bank.

Landing a little in our context, the bank is the major facilitator of credit anywhere in the world. That is to say, the credit relationship is established with the bank and it is the bank that approves the form of commercial credit to companies or businesses for their development. When we use credit as a form of payment, it constitutes a debt that we must pay as we earn income with our business in a previously agreed time. The time determinant works for the purpose of applying fees or penalties by accruing interest in favor of the bank.

Credit worthiness.

As we know, banks always need to have a guarantee for the money they lend to their clients, individuals or companies. In the case of the commercial credit the only guarantee is our own creditworthiness, the capacity that we have to be able to pay back the money without the need to mortgage a property as it happens with the loan. There are margins in this regard, the bank can approve the credit according to our business economic solvency, they will hardly approve an amount that we cannot guarantee with our business, so an approximate amount is established according to our regular income. Naturally, if we have an unfavorable credit history of delays or even debts, we will not be eligible for a commercial credit.

Credit score.

Sometimes we use personal credit to cover our business expenses. It is necessary in this case to clarify that both commercial and personal credit have different characteristics in terms of their legal terms and therefore consist of different information. The personal credit score ranges from three hundred to nine hundred, while commercial credits have a score between zero and one hundred. One of the factors that determine the credit score by the lenders is the payment history, if we have had delinquent payments, debts or the size of our company.

Credit reports.

A credit report is the part that contains the proper description of our business as well as its more detailed information and identifies us as a business entity once our LLC is formed. It is important to keep it distinct from us as an individual, so we must incorporate the