Trade credit can prove problematic for vendors. Although it may facilitate sales that would otherwise be lost, it can also result in a loss of operating cash flow. This is due to a sale being made, but the corresponding payment potentially not being received for several months. What’s more, vendors can be left seriously out of pocket if the buyer defaults on their agreement (e.g. goes out of business before the debt can be settled). This risk may be mitigated by trade credit insurance.