{"id":28368,"date":"2018-07-18T16:59:37","date_gmt":"2018-07-18T15:59:37","guid":{"rendered":"https:\/\/www.ratedpeople.com\/blog\/?p=28368"},"modified":"2021-04-26T17:59:41","modified_gmt":"2021-04-26T16:59:41","slug":"trade-references","status":"publish","type":"post","link":"https:\/\/www.ratedpeople.com\/blog\/trade-references","title":{"rendered":"What are trade references and why do I need them?"},"content":{"rendered":"\n

Trade references can help small businesses get trade credit from suppliers so they can buy materials now and pay later.<\/strong><\/p>\n\n\n\n

Some business-to-business companies have the option of buying now and paying later. To do this, they need to see one or more trade references vouching for your creditworthiness.<\/p>\n\n\n\n

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It\u2019s a service that\u2019s offered by many businesses selling building and decorating materials, so for tradespeople it can be invaluable. You can stay working while you\u2019re completing jobs, or waiting for money to come through from work you\u2019ve finished.<\/p>\n\n\n\n

What is trade credit?<\/strong><\/h2>\n\n\n\n

Trade credit is used to give tradespeople immediate access to tools and materials on credit. Before you can get trade credit, you agree the credit limit and number of days until repayment must be made. Repayment terms vary, but on average repayment is usually required within 30 days.<\/p>\n\n\n\n

Advantages of trade credit<\/h3>\n\n\n\n

Trade credit is an extremely useful form of short-term finance that can be particularly useful for new businesses.<\/p>\n\n\n\n

Whilst many start-ups may struggle to meet the requirements necessary to win a loan from a bank or an investor, trade credit is usually relatively easy to get, and has the added benefit of no extra costs or interest.<\/p>\n\n\n\n

Trade credit means you\u2019re not dependent on payments from previous jobs before you can crack on with the next one. For small businesses, cashflow is crucial, so trade credit takes this pressure off.<\/p>\n\n\n\n

Most businesses that use trade credit often have more work than they would otherwise, as they\u2019re able to take on more of the opportunities that come their way.<\/p>\n\n\n\n

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What are trade references?<\/strong><\/h2>\n\n\n\n

When you first contact a new supplier about a trade credit account, they may ask you to supply them with the contact details for one or more trade references.<\/p>\n\n\n\n

Trade references allow the supplier to check your creditworthiness and find out if you\u2019re a reliable customer before they offer you credit.<\/p>\n\n\n\n

When applying for trade credit you\u2019ll usually have to give the contact details for your trade references for the company to then follow up. Your referees will then be sent a written reference request asking questions about their experience working with you.<\/p>\n\n\n\n

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Common questions that are asked in a trade reference request include:<\/p>\n\n\n\n