Overview of a Letter to Supplier Requesting Credit Terms

The Letter to Supplier Requesting Credit Terms is a simple letter issued by a business to request credit terms from a supplier. It is the first letter of contact. As such, it does not include details of the credit request.

Why is a Letter to Supplier Requesting Credit Terms Important?

Essentially, business conditions change.  Sometimes, it is necessary to request for longer or different credit terms for paying back a supplier. Typically, this may be  because of adverse business conditions or a change in plans. In essence, a Letter to Supplier Requesting Credit Terms helps to open communications with a supplier so that better payment terms can be negotiated.

When to Use a Letter to Supplier Requesting Credit Terms

Mostly, payments to suppliers are made either on the shipment or 30 days after contract.  In either case, the sooner this document can be sent the better. Importantly, suppliers also need to maintain cash flow to sustain their operations.  Subsequently, getting this information to them sooner will make them more willing to help.

What if You’re a Supplier?

Generally, if you received this document for a change in credit terms, keep in mind that the customer is willing to negotiate in good faith.  A friendly but formal response can only lead to a good outcome.

Conversely, if your customer is late on a payment, then you can send them a demand letter to demand payment.

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