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Trade credit terms in Australia

Trade credit in Australia – as opposed to bank credit – is a vital source of business funding.  By offering trade credit terms, goods and services can be exchanged before payment needs to take place, usually on interest-free terms that vary by industry and business type. The exact terms make it possible for businesses big […]

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Outdated trade credit due for innovation

Trade credit is the practice of supplying goods and services to a business or individual with an agreed payment at a later date. Not all businesses use trade credit. Instead, some businesses and sole traders require upfront, cash-on-delivery or even pre-payment for goods and services supplied. In allowing a delayed payment, also known as “net […]

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Late payments hinder business growth

Late payments are a perpetual problem for businesses around the world, including Australia. When doing business, companies typically agree to payment terms in exchange for goods and services. However, according to research, Australian businesses receive their payments consistently late – almost 10 days overdue to be precise.[1] On average, that’s more than a full third […]

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The power imbalance of SME trade credit

SME trade credit has not seen much innovation in the past 40 years, despite significant digitisation and technology advances across supply chains. The way trade credit has traditionally been supplied by non-financial entities is driven by market forces of supply and demand. Over time, it has created a power dynamic mismatch between buyers and suppliers, […]

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Preserving SME trade credit relationships

Offering SME trade credit terms is standard practice for businesses in many industries.  Both the amount of trade credit (the limit) as well as the length of the terms offered, are important elements of the overall trade relationship between buyer and seller.   Part of the reason third-party finance solutions have not effectively disrupted in-house trade […]

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Trade credit marred by chronic inefficiency

With so much business capital outstanding as part of the trade credit economy, it’s safe to say that nearly every business in Australia, large and small, is linked in some way to this vast ecosystem. Far from a win-win solution, trade credit is actually quite complicated. Net terms range from 7, 14, 30, 60 days […]

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