In our current economic conditions, we are still seeing an increased level of defaults and litigation that involve failing businesses, especially small and undercapitalized businesses. Most business customers fully intend to pay when they apply for credit. However, you still need to protect yourself from the adverse economic impact when those customers do not pay. One of the best ways to […]
The need for a financial statement will be determined by the extent of the risk exposure and the information already obtained from your credit investigation. From both the credit application form and subsequent credit investigation, a quantified decision should be able to be made as to the credit limit and what the perceived level of risk may be. Keep […]
The Equal Credit Opportunity Act (ECOA) and Regulation B prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age (provided the applicant has the capacity to contract), or because an applicant receives income from a public assistance program or has in good faith exercised any right under the Consumer Credit Protection […]
Businesses should understand that when credit terms are offered some companies will not pay timely and others will not pay at all. Developing a well thought out credit policy will helpminimize slow paying accounts and bad debts; however you will never eliminate them entirely. The thoroughness of your credit investigation should depend on the amount of credit you extend […]
A personal guaranty is commonly required by credit professionals to reduce credit risk when selling to a corporate debtor. The guaranty is normally signed by a principal of the company that is purchasing the goods or services offered by the seller. It acts as an inducement to the seller to sell on credit terms to the corporate debtor. Some credit […]
