Some of the factors that influence the credit period in Trade Credit are as follows:
Nature of the Goods – If the goods are perishable in nature and cannot be sustained for a long period, then the seller may reduce the credit period.
Size of the Account – If the account is not a huge business, the credit period will be shorter because it is costlier to manage smaller accounts.
Creditworthiness – If the firm is providing credit to a high-risk business entity, the credit period and terms will be more stringent to ensure that they pay back the amount on time.