Trade Reference Definition
If the company is able to provide a reference from within the same industry, that is a good indicator of how quickly you will get paid. If they are providing a reference from outside the industry, such as their electric company, it may not be as indicative of their payment history, since you must pay the electric bill to keep it on. These of course are not the only types of companies that can be a valuable reference, below are a few other example of both good and bad sources of information. You’ll quickly find this out when you fill out an application for a loan or credit.
If they gave you a receipt with your business name on it, it is likely in their records, too. DisclaimerAll content on this website, including dictionary, thesaurus, literature, geography, and other reference data is for informational purposes only. This information should not be considered complete, up to date, and is not intended to be used in place of a visit, consultation, or advice of a legal, medical, or any other professional. The customer file is now credit decision-ready, with all the backup information. Approval workflow enables swift routing to other decision-makers and decisions on credit terms and limits are communicated with the customer through correspondence workflow. Speed up your business’s document workflow by creating the professional online forms and legally-binding electronic signatures.
In the case of bank references, banks take a lot of time to verify the customer’s references. Credit teams have to frequently follow up with the banks to receive the bank reference verification – this slows down the new customer onboarding process. All you have to do is download it or send it via email.
The $8,000 is reported for this data point in the submission. Primary references, such as suppliers of computer equipment and raw materials, are the most valuable. Trade references are generally creditors and suppliers within the industry, as opposed to utilities such as phone and electric service.
As a trade reference data point, other creditors are able to determine how much issued credit a customer is utilizing. Customers who utilize close to 100% of their credit may be a higher risk customer than those who utilize less than 50% of available credit. Also called the manner of payment, it’s a description of the payment method used by the customer. This might be a business credit card, check, ACH, wire, or even cash.
A good PAYDEX score can mean lower interest rates, lower premiums, and access to credit lines with suppliers and vendors. Your business is a reflection of you, and your business credit report reflects your financial responsibility. Your payment history is one of the key factor that shows just how strong your business is and how capable it is at functioning on its own merit.
Credit Reference Types A credit reference can be anyone who has given you credit or otherwise had a financial relationship with you. Examples might include your credit card company, local bank, investment firm, previous landlord or a local business that gave you a payment plan. Trade references can be used in a wide range of business situations but they are mostly seen as requirements asked by credit suppliers.