Keeping your money longer means it can earn interest in the bank or be available for an emergency when cash is tight. Trade credit is short-term interest-free credit.

You may have 30, 45, 60 days or more from the date your ordered goods leave the supplier to pay for the goods.

To apply for trade credit, some suppliers will request a letter of intent. This letter of intent includes details about your company, your financial institutions, your credit history and your financial references.

Type the letter left-aligned in block format in a word processing program.

Enter the date and start a new paragraph.

Enter the heading "Business Contact Information" and press "Enter." Enter the company's contact information. Start a new paragraph. Enter all contact information in this format.

Enter the heading "Supplier Contact Information". Below it, enter contact information for the supplier. Start a new paragraph.

Type "To Whom It May Concern:" or the name of the person the letter will go to if you have it and start a new paragraph. Depending on the size of the supplier, the letter may go to an individual or to a department.

Describe the specific trade credit terms you would like with this supplier and start a new paragraph. Standard terms include 15, 30, 45, 60 and 90-day terms. The most common terms are 30-day terms, meaning you have 30 days from when ordered goods leave the supplier's warehouse to pay for the goods.

Enter information about your business including the type of business (sole proprietorship, LLC, partnership, corporation or other), the number of employees and the date the business was formed. Additionally enter your company's tax-ID number here. For sole proprietorships, this will be your Social Security number. Start a new paragraph.

Enter contact information for your bank and press "Enter." Type "Type of Account: " and specify whether the account is a checking, savings, money market or some other type of account. Enter the name of your personal banker if you have one. Add his contact information including his name, telephone number and e-mail. Start a new paragraph.

Enter contact information for three business trade references. Start a new paragraph after each reference. Choose suppliers you have worked with the most to be your trade references. Ask them for permission to list them on your letter of intent because the supplier you are seeking trade credit with will contact them seeking information about your reliability.

Type a line for signature and hit the "Enter" key and the name of the authorised signature. Hit the "Enter" key and type the authorised signature's position in the company. Align these three lines to the centre.

Save and print the file.


For sole proprietors who do not want to enter a Social Security number on a letter of intent, get a EIN (tax ID) number from the IRS. It is easy, and it is free.