One of the most effective ways to protect your business and minimize risk is to develop an effective credit application. The application process allows you to eliminate borrowers who might be likely to default on payment.
Our sales representatives will ensure that the customer has provided all the pertinent information, and will attach a copy of the sales application with the credit policy.
- Bank references.
- Trade references.
- Organizational details (type of structure, years in business).
- Miscellaneous “qualifiers” such as the credit history of the principals or a personal guarantee.
All credit line requests in excess of a specified amount should require financial statements. In considering a personal guarantee, financial statements should also be requested from the principals. The sales application is designed to obtain limited information that is critical to the credit function’s due diligence. Less than full disclosure will hinder the credit approval process. Verification of the information on the sales application is performed via a customer investigation.
For a sample credit application, click here.