Of the two types of credit, trade and consumer, consumer is the easiest to offer and maintain. Consumer credit involves the acceptance of major credit and debit cards. To offer this service, you simply approach your bank and set up a program. The bank takes a small fee or percentage on each charge and in exchange, it accepts the credit risk.
Trade credit is offered by the business itself.
In some industries, such as manufacturing and wholesaling, customers expect trade credit. For example, when a wholesaler ships supplies to a retail company, the accompanying invoice indicates terms of payment. Most wholesalers give the retailer 30 days to pay the bill, which amounts to 30 days of credit. Before you make trade credit a policy, make sure you understand the risk and take steps to reduce it. The best way to do this is to get training in credit procedures.