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As an SME or a Startup, you might get requests from your customers to have credit terms with your business. Not all are eligible to get credit terms. This is letter is to be used when you need to inform a customer that he or she has not qualified for the credit terms.

This is a delicate matter and must be handled in a graceful way. The declining letter should ideally include an open door for future applications from the same person or business.

3 steps to rejecting credit

1. Acknowledgement: thank the person who has approached you for their interest and acknowledge receipt of their request or offer.

2. Denial: As difficult, uncomfortable, and unpleasant as it is to turn down or revoke credit, it is equally displeasing to hear it too. So, prepare well and have well-rounded and justified reasons. Ensure that your reason for denial is well put.

3. Closing: There could be numerous reasons for rejection and although you might put it kindly, it could be a difficult pill to swallow for the other party. Hence close the rejection with alternative offers. Ensure that your tone is polite and that no 
derogatory remarks are involved.


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